When a beneficiary dies after the deceased but before the estate is settled, the first step is to look at the will (if there is one).
Many wills have a "survival clause". This is a clause saying that the beneficiary becomes entitled to their gift under the will only if they survive the will-maker by a certain time period (for example, 30 days).
If the will does not have a survival clause or there is no will, the law sets out a "five-day survival rule". A beneficiary who dies within 5 days of the deceased is deemed to have died before the deceased person for all purposes respecting the deceased's estate or property. If this is the case, section 46 of the Wills, Estates and Succession Act sets out how the beneficiary's share would be distributed.
If the survival rules don't come into play, the beneficiary's share of the estate would pass to the beneficiary’s estate. That is, the gift to the beneficiary would become part of the beneficiary's estate and be distributed according to their will or under the rules of intestacy (if they didn't have a will).