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Understanding the Common-Disaster Clause and Its Legal Significance
Definition & Meaning
A common-disaster clause is a provision found in legal documents like insurance policies and wills. This clause addresses situations where both the transferor (the person providing the benefit) and the transferee (the person receiving the benefit) die in the same incident, such as a car accident. Under this clause, the primary beneficiary must survive the insured individual for a specified number of days to be eligible for the policy benefits. If the primary beneficiary does not survive, the benefits will go to a secondary beneficiary.
Table of content
Legal Use & context
The common-disaster clause is primarily used in estate planning and insurance law. It helps ensure that the intended beneficiaries receive benefits even in tragic circumstances. This clause is particularly important in family law, where the distribution of assets may be affected by the simultaneous deaths of family members. Users can manage this through legal forms tailored to their needs, such as those provided by US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: If a couple dies in a car accident and the husband had a life insurance policy naming his wife as the primary beneficiary, the common-disaster clause would require her to survive him for a set number of days to claim the benefits. If she does not survive, the benefits would go to the secondary beneficiary, such as their children.
Example 2: (hypothetical example) A person has a will that includes a common-disaster clause. If both they and their partner die in a plane crash, the clause ensures that their assets are distributed according to the will's terms, rather than defaulting to state laws that might favor the partner's family.
State-by-state differences
Examples of state differences (not exhaustive):
State
Common Disaster Clause Treatment
California
Common disaster clauses are enforceable and often included in estate planning documents.
New York
Similar provisions are recognized, but specific wording may be required for enforceability.
Texas
Common disaster clauses are valid; however, state laws may dictate certain requirements for clarity.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Survivorship Clause
A provision requiring one party to outlive another to inherit or receive benefits.
Focuses on individual survivorship rather than a common disaster scenario.
Contingent Beneficiary
A secondary beneficiary who receives benefits if the primary beneficiary cannot.
Does not specify conditions for simultaneous death, unlike the common-disaster clause.
Common misunderstandings
What to do if this term applies to you
If you are considering including a common-disaster clause in your estate planning or insurance policy, consult with a legal professional to ensure it is properly drafted. You can also explore US Legal Forms for templates that can help you create the necessary documents. If your situation is complex, seeking professional legal assistance is advisable.
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