Matthew McDavitt—Senior Attorney, National Legal Research Group
In some wills, testators expressly condition the beneficiaries’ receipt of legacies upon their survival to the date of actual distribution of the gift during the estate administration. In such circumstances, the question occasionally arises regarding the propriety of such survival mandate where (1) the administration is delayed beyond the average length due to dilatory conduct by the executor or due to litigation, and (2) one or more legatees survived the testator’s death but died prior to the distribution of the legacy. A handful of courts nationally have addressed this fact pattern, arriving at a logical rule applicable when unusual delay in distribution results in the one or more legatees predeceasing distribution.
It is well-settled that the “personal representative is under a duty to settle and distribute the estate of the decedent . . . as expeditiously and efficiently as is consistent with the best interests of the estate.” 31 Am. Jur. 2d Executors and Administrators § 686 (2021). As such, a handful of American courts examining the issue have concluded that the equitable rule in this circumstance is that legacies conditioned upon beneficiary survival to the date of distribution vest at the time such legacies could first have been distributed (often a year from when the estate was opened), to protect such gifts when the administration is unduly delayed. As summarized by one major secondary authority:
[T]he vesting of a beneficiary's interest under a will generally cannot be postponed by an unreasonable delay in preparing an estate for distribution, and when there is such a delay, contingent interests vest at the time distribution should have been made. Accordingly, a beneficiary's interest that depends upon survival of distribution cannot be defeated by an unreasonable delay in distribution.
80 Am. Jur. 2d Wills § 1162 (through 2021 Update); see also In re Estate of Dunning, 102 N.J. Super. 442, 246 A.2d 142 (App. Div. 1968) (where will's residuary clause bequeathed property to testatrix's children who survived and estate was ready for distribution and papers necessary to consummate transfer to son were approved by son but were not timely signed due to his illness, bequest to son who survived testatrix did not lapse by virtue of son's death prior to actual distribution and receipt of gift); In re Estate of Taylor, 66 Cal. 2d 855, 428 P.2d 301 (1967) (executor petitioned for distribution to the alternative beneficiaries; the Superior Court ordered distribution to primary beneficiary, and alternative beneficiary appealed; the supreme court held that where will provided that one-third of residue of estate should go to woman if she survived distribution of estate and but for belated decision to sell securities, estate could easily have been distributed before woman's death, woman's interest vested in her before her death); In re Estate of Laise, 18 N.J. Super. 395, 87 A.2d 362 (App. Div. 1952) (under will providing that gift to certain beneficiary should fail if such beneficiary should die prior to distribution of gift to her, such gift would not fail even if such beneficiary died before actual payment to her if executors, through due diligence in settling estate, could have made distribution prior to death of such beneficiary).
Therefore, when an estate distribution is unduly delayed and the will mandates that beneficiaries survive to the point of distribution, the majority rule is that the interests are held to vest on the date they could have been distributed in a normal administration, protecting these gifts from delays caused by circumstances outside of the beneficiaries’ control.