What it means
A gift lapses when the intended beneficiary dies before the will-maker, so the gift cannot take effect. A lapsed gift usually falls into the residuary estate, or, if it was the residue itself, may pass under intestacy. Most Australian jurisdictions have 'anti-lapse' provisions that can save a gift to certain relatives (often a child of the will-maker) by passing it to that person's own children instead. Naming substitute beneficiaries in the will avoids uncertainty.
How it's used
When his brother died first, the gift would have lapsed, but anti-lapse rules passed it to the brother's children.