Simultaneous deaths of both a husband and wife or other types of survivorship situations can disrupt how their estates are handled. It is advisable to include a simultaneous-death clause in estate planning documents, including wills and/or trust documents. This helps surviving beneficiaries avoid problems, such as estate taxes being accessed a second time, or the estates being subjected to the Uniform Simultaneous Death Act.
What is a Simultaneous-Death Clause?
A simultaneous-death clause addresses the possibility of both spouses, or other types of beneficiary situations when both parties die at the same time or within a short time of each other. These deaths often result from an unnatural cause, such as a homicide, murder-suicide or fatal car crash. This clause was originally designed for high net worth individuals who planned to leave all or some of their assets to one another. It is also known as the “Titanic clause” in reference to the debacle with settling estates with so many simultaneous deaths of testators and executors occurring with the sinking of the Titanic.
Why is a Simultaneous-Death Clause Needed?
The simultaneous-death clause simplifies the dispersion of assets to heirs. It deals with the dilemma of determining which spouse has died first in an accident or when the intended beneficiary dies within a short time afterward. A simultaneous-death clause might stipulate that a minimum period of time must pass before an intended beneficiary can receive the deceased assets, like sixty days or six months.
Having such a clause would protect the first estate from going through probate court twice, and most importantly being taxed twice if the beneficiary died at the same time or soon after. An example of such a survivorship clause might be, “If any of my beneficiaries die within sixty (60) days after I die, it will be presumed that they have predeceased me.”
Defaulting to Uniform Simultaneous Death Act
When a simultaneous-death clause is not specified in estate planning documents, the Uniform Simultaneous Death Act comes into effect. This Act allows for each spouse to be treated as if they predeceased each other if they were to die within 120 hours of each other. In Illinois, this results in the property of each of the deceased being disposed of as if he or she had survived. However, careful estate-planning by including a simultaneous-death clause would prevent this from happening.