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A beneficiary is a person who will receive your assets after your demise. It might be a little disturbing for you to think about your death but understand that it is a part of life. You may consult an estate planning lawyer who can help you make a will. In this blog, you will read in detail about the beneficiary.
Types of beneficiaries
Primary beneficiary
The person who will first receive your assets is called the primary beneficiary.
Secondary or Contingent beneficiary
If the primary beneficiary can’t receive your belongings, they will be passed on to the secondary beneficiary. It happens when the primary beneficiary dies or declines the assets.
Residuary beneficiary
The remaining assets which are not designated to any other beneficiary go to residuary beneficiaries after the payment of debts (if any) are done.
Who can be made a beneficiary?
If you think that your spouse or children can only be the beneficiaries, then you are wrong because apart from your spouse and children, a beneficiary can be-
- Relatives/friends- You don’t need to have a documented relationship with the person to whom you want to give your property and money. So it can be any of your relatives or friends.
- A Non-Profit-Organization- Some people donate their assets to a cause close to their heart to create a long-lasting impact even after they pass away. It is indeed a noble thing to do.
- A Trust- It is a third party that holds your assets to ensure the distribution of your property as per your will.
While making a will, you should be aware of the fact that children under the age of 18 years can’t get access to your assets until they are adults, so make sure that you choose a reliable financial guardian who will take care of your property and money till the time it gets transferred to your chosen beneficiary child.
What happens if you write the names of the beneficiaries in your will
- If you don’t name any beneficiary in your will, it will be transferred to residual beneficiaries.
- If all the beneficiaries pass away, then the court will distribute the assets to your spouse, children, then family, and relatives.
- In the worst scenario, it will be transferred to the state. But it rarely happens because your assets are generally given to your relatives no matter how distant they are.
Conclusion
Don’t delay making a will as life is unpredictable so take complete control of the distribution of your assets.
