Here's an example of how alternate beneficiaries work.
This means that John will own 60% of the asset, and Jane owns 40%. Here are some hypotheticals and their results: If John predeceases you, his 60% share of the asset goes to Jane, who now owns 100%. If both John and Jane predecease you, 75% of the asset goes to Sam and 35% will go to Susan. If John, Jane, and Sam all predecease you, then Susan gets 100% of the asset. Only if John, Jane, Sam, and Susan all predecease you would the asset be distributed with the residue (remainder) of your estate.