by Andrew A. Strauss
We are often asked by our clients about what happens if there is a simultaneous death. While this occurrence is very unlikely, our clients are nevertheless concerned that it might happen to them. It happens not only in airplane crashes, but in thousands of car crashes a year resulting in multiple deaths.
North Carolina law states that a right to benefit in property that depends upon an individual surviving another individual (such as joint tenants with right of survivorship) will go to the survivor if there can be clear and convincing evidence of the surviving joint tenant having survived the person who passed by at least 120 hours. Absent clear and convincing evidence of who survives who for at least 120 hours, the property is then equally divided into as many shares as there are joint tenants. This is sometimes called the 120-hour rule and is embodied in the Simultaneous Death Act which has been adopted by most states, including North Carolina.
If clients do not want to rely on the 120-hour rule to determine who benefits from the property, then they can specify what happens in their governing instruments such as a will or trust. A typical “common disaster” provision that we often use is: “If my wife and I die under circumstances in which the order of our deaths cannot be established, my wife will be considered to have survived me. If any other beneficiary is living at my death but dies within 90 days after my death, then the beneficiary will be considered to have predeceased me for this trust’s purposes.” Why is there a distinction between spouses and other beneficiaries?
First, there is the desire to avoid the need to probate two estates simultaneously within one marriage. Second, there is the opportunity to dictate that the less wealthy spouse survived the wealthier spouse, which may be beneficial for tax purposes and other financial considerations. The method for achieving this is simply to include a provision that says if both spouses die simultaneously, spouse X will be deemed to have survived spouse Y.
The inclusion of a survivorship provision in a will or trust is good drafting. The intent is to get the possible tax result while avoiding unnecessary administration expenses. The bottom line is to maintain control over what happens to one’s estate in the face of an unlikely “common disaster” situation.