Hi Frank, good question. I do not however agree with your analysis. Typically if the estate is to be divided to the children of a predeceased child the language would read something like to my children, a, b, c, d, or if any of my children shall fail to survive me, to their respective issue per stirpes. (per stirpes means "by representation" to the descendents of deceased children). i think that simply based on the language you present the will is okay - although sometimes the will might say something regarding "the predeceased beneficiary's share shall be distributed on a pro-rata basis among the surviving beneficiaries in this paragraph" or some such language. I do see where some confusion might arise and I encourage your parents to have the will reviewed by an attorney to be sure any changes are properly made.
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If your parents mean that the assets should be divided three says, the language is not what most estate planning attorneys would use. It would be much clearer if there was an additional sentence saying something like - if a child predeceases me, the share set aside for him/her should be distributed to my living children in equal shares. A common way to have the children of a deceased child take his or her share is to use the words "per stirpes." Then, the deceased child's share would be distributed in equal shares to his or her children. I would advise your parents to see their attorney to clarify the languae in their wills or trusts,
I concur with both counsel. The language is not clear. If the intent is that if one of their children dies before them the deceased child's share should be re-distributed among siblings the will should state this. Arguably, under the anti-lapse statute because this a residuary division of assets failure to state that the share that would pass to a predeceased child passes down the family line could mean that the share lapses and passes to the surviving named residuary legatees, So, they should review their wills to make sure that there intent is clear.