Lapsed Gift

A gift lapses when the intended beneficiary dies before the testator and the Will names no substitute beneficiary. The lapsed gift usually falls into the residue, or — if it was a residuary gift — may pass under a partial intestacy. Many states have "anti-lapse" rules that save a gift to a child or other issue by passing it to that person's own children, but the detail varies by jurisdiction.

Lapse is avoided by naming substitutes or using a per stirpes distribution. Example: a Will leaves $50,000 to a friend who dies first; with no substitute named, the gift lapses and falls into the residue. Lapse is different from ademption, which is about the asset no longer existing rather than the beneficiary dying.