Wording for a Will on percentage distributions

November 23, 2018 1:16 PM

I'm struggling to come up with wording in my will that clearly and understandably accomplishes what I'm after. Lets say that I have dollars that I want to distribute in various percentages to beneficiaries b1, b2, b3, b4, b5, with respective percentages p1, p2, p3, p4, p5. If one of the beneficiaries predeceases me then I want the percentages restated in a way that preserves the original weightings.

So, let's say that b3 has died, then I want new percentages:

original percentage* (100/(b1+b2+b4+b5)).

But my lawyer is satisfied with the simple statement: "... then to the other beneficiaries in the same proportions as above." I'm not sure that does the trick. I showed the paragraph in the Will (including actual percentages and dollars) to the likely executor who is good at arithmetic but lacking in algebra. She got the wrong answer but understood when I showed her the formula.

Should I use algebra? Provide an example? Spell it out in words; eg multiply each percentage by a fraction with numerator ... and denominator ..., etc.?

I would think there would be some standard wording for this situation. Mainly I want to prevent any confusion or provide an opening for a legal challenge during probate.

Any ideas?

Thanks

posted by Kevin S to Work & Money (14 answers total)

Best answer: I'm curious to know more specifically how the potential executor got it wrong. If she had performed the same calculation for all beneficiaries, would the total amount have come up short forcing her to re-do the math (and possibly coming up with the correct answer the second time)?

The only rephrasing that I can think of is to use the concept of "weights" or "relative weights". So something like "in case one or more beneficiary is deceased, the proportions assigned to the remaining beneficiaries will be treated as relative weights for the purpose of dividing the inheritance".
posted by jomato at 1:30 PM on November 23, 2018

Response by poster: In fact she knew her answer was wrong and I imagine could have worked it out eventually. I like your "in case one or more ...".
posted by Kevin S at 1:37 PM on November 23, 2018

IANAL but I think the lawyer's language is clear and unambiguous. You might provide a note to the executor that if any of the original beneficiaries predecease you, they can recalculate by adding up the total of the all of the remaining percentages and then take each person's original percentage and divide it by the new total to get the new number.

Eg: New total = p1+p2+p4+p5 and new percentage equals p1/new total, p2/new total etc.
So, if each of 5 person got 0.20, one person drops out, the new total is 0.80 and original %/ new total is .2/.8 or .25
posted by metahawk at 1:45 PM on November 23, 2018

And make the executor knows that 20% can be written as 0.20, it makes the math easier.
posted by metahawk at 1:47 PM on November 23, 2018

If an heir dies, you want their portion of the estate redistributed proportionately among the surviving heirs. So if two die, and the remaining three were originally entitled to 20%, 10% and 10%, they'd wind up with 50%, 25% and 25% respectively.
posted by chesty_a_arthur at 1:47 PM on November 23, 2018 [2 favorites]

I believe you could get the equivalent result thinking in terms of shares rather than percentages, and nonmathematicians will probably find that framing more intuitive.

So you could say: "Give B1 one share, B2 two, B3 three, and B4 four. If all four survive me, this will mean dividing the money into ten shares. If some predecease me, compensate by dividing the money into fewer shares. For instance, if only B3 and B4 survive, divide the money into seven shares, so that B3 still gets three and B4 still gets four."

You could probably do wordsmithing on that to make it clearer and more elegant. But I think setting it up that way will make people more confident that they are getting the right interpretation.
posted by nebulawindphone at 1:51 PM on November 23, 2018 [4 favorites]

Best answer: The thing that you want to be careful about here is that if anyone questions the actions of executor and it goes to court, you want to be sure that your wording is clear from a legal perspective. Some words can have specialized meaning in the legal context that may not be exactly what you expect. Other times, certain language has been well litigated so it is very clear to a judge and lawyer what is meant while making up your phrases may mean that it becomes more ambiguous to the legal folks what the intention is (more ambiguous = more lawyer time = more expensive).
posted by metahawk at 3:21 PM on November 23, 2018

Response by poster: Metahawk - exactly, that's one of my main concerns. Glad it's not just me who thinks that.
posted by Kevin S at 4:28 PM on November 23, 2018

I have absolutely no idea what a lawyer would think of this suggestion, but: there are only 32 possible scenarios here. That's small enough that maybe you could just include a complete table with all the proper distributions precomputed, so the executor just chooses the correct row based on who is alive and who is dead.
posted by equalpants at 5:59 PM on November 23, 2018

Response by poster: I see I made an embarrassing error: in the original post it should be "original percentage * (100/(p1+p2+p4+p5)). So much for mathematical rectitude.
posted by Kevin S at 7:27 PM on November 23, 2018

Response by poster: equalpants - Maintenance would be a little cumbersome if I want to change the distribution list, which could well be the case every 5 years or so. Interesting idea though.
posted by Kevin S at 7:36 PM on November 23, 2018

Why not express it in "parts" or "shares" rather than percentages? Thus, for example, if there are four beneficiaries getting, respectively, five parts (50% if all are alive), three parts (30%), one part (10%) and one part (10%), if any of them die the percentages automatically adjust as the pie is divided into parts. So, in the above example, if the beneficiary getting three parts dies, there are now only seven parts -- the five part beneficiary gets 71.4% and the two one part beneficiaries get 14.3% each; if the beneficiary getting five parts dies, there are now only five parts -- the three part beneficiary gets 60% and the two one part beneficiaries get 20% each; if the five part and the three part benificaries both die, there are only two parts remaining -- the two one part beneficiaries each get 50%.
posted by slkinsey at 7:52 PM on November 23, 2018 [1 favorite]

Best answer: This is actually a little more complicated than you may realize and I'm surprised your lawyer isn't on top of it.

If you leave an asset to someone and they predecease you, then the asset will generally pass to the residuary beneficiary (the person who inherits "everything that's left" after other bequests are paid out). So, without more specific instructions, the 20% won't be redistributed amongst the others in the group unless the group constitutes the residuary beneficiaries.

If they are, I do believe that the scenario you want is actually the default distribution, but state law can vary on this.

My suggestion, if I were drafting from scratch, would be something like:

"Of the funds in X account, 20% to A, 30% to B, 15% to C, 15% to D, and 20% to E; but if any of these predecease me, the money that would have passed to that person to be redistributed amongst the survivors of the group in such a way as to preserve the relative proportions established amongst them."

However. Rewriting what your attorney proposes because you're vaguely dissatisfied with it is a very risky move. You don't understand the default rules that will fill in any gaps and you don't know what various "terms of art" may mean. (My solution is generic but there might be some state-law reason it wouldn't work.) My real recommendation is that you speak to your attorney, explain your concern, and ask her to explain in more detail why she thinks her recommended wording will accomplish your desires.

(If it helps, I don't know what your actual situation may be, but people sometimes tend to indulge in fantasies about people battling over their wills that are very very unlikely to ever materialize unless a really significant amount of money is at stake. Most family fights over property after death aren't carried out in the courts and tend to deal with expectations thwarted by the will or assets that weren't specifically divided up because the testator assumed that grown people could handle deciding amongst themselves who got what piece of furniture.)
posted by praemunire at 10:59 PM on November 23, 2018

Response by poster: praemunire - Thanks, that's all very helpful. At the moment the Will document is going back and forth between me and the attorney. I think he knows what he is doing but I retain some "vague dissatisfaction" with the jointly developed wording regarding redistribution. I like your "... preserve the relative weighting" - I think somewhat better than what we currently have in the draft document although the same idea. The attorney will certainly see the final version. You are right about "...indulging in fantasies about..." Thanks again.
posted by Kevin S at 8:08 PM on November 24, 2018