Anti-lapse Statutes
Most common-law jurisdictions have enacted an anti-lapse statute to address this situation. The anti-lapse statute "saves" the bequest if it has been made to parties specified in the statute, usually members of the testator's immediate family, if they had issue that survived the testator. For example, the New York anti-lapse statute specifies brothers, sisters, and issue, specifically. If the anti-lapse statute does indeed apply, then the issue of the deceased beneficiary will inherit whatever was willed to the beneficiary. The testator can prevent the operation of an anti-lapse statute by providing that the gift will only go to the named beneficiary if that beneficiary survives the testator, or by simply stating in the will that the anti-lapse statute does not apply.
Another modification to the common law of lapse is the elimination of the "no residue of a residue" rule where multiple beneficiaries are named to inherit the residue. The modern view is that where a beneficiary was intended to inherit part of the residuary estate who predeceases the testator, and that beneficiary is not covered by the anti-lapse statute, then that beneficiary's inheritance will return to the residuary estate, to be inherited by the other beneficiaries to whom the residue has been willed.
Read more about this topic: Lapse And Anti-lapse