The main purpose estate planning experts have in recommending that you create a will early on in your life is to ensure that whatever assets and properties constitute your estate are dispersed in the manner that you want them to. You, then, will no doubt put a good deal of time and effort into deciding which of your beneficiaries will receive what. Yet even the best-laid plans cannot always guarantee that things work out as you anticipate, and certain intended transfers of property stipulated in your estate planning documents will fail. What happens then?
A question that may need to be answered first is why would a transfer of property fail? There are actually a number of reasons why this may happen. The party you intended to receive property may have themselves passed away, or they may be in a position where they cannot manage the ownership of it. There also may be situations where they simply refuse the gift.
According to Section 21111 of the California Probate Code, you can include provisions in an estate planning instrument that dictate a secondary transfer. These would then be honored in the event that the first transfer fails. If you do not stipulate an alternative disposition for an asset, yet you do set forth terms that describe the method in which residual assets and properties be transferred, then the property whose primary disposition failed would then be classified as a residue and would be dispersed accordingly.
If you do not stipulate any alternative or residual dispositions, then any properties whose intended transfers of ownership failed would be transferred to your estate. Any beneficiaries who are entitled to a portion of your estate would then be granted ownership of them (or the proceeds of their liquidation).