Beneficiaries of Wills – What to Know
Most people do not like thinking about their death. It is however impossible to ignore death as a reality of life. This is why you are advised to write a will early in life. To write a will, start by identifying your dependents. Dependents can be different people ranging from family members to friends. It is important though to let them know of the contents.
The definition of a beneficiary is the person who is in line for inheritance upon death of the owner of the will. The beneficiary will end up inheriting the estate stated in the will. Sometimes the beneficiary is a minor which means that they will wait to reach legal age to get the benefits in the will. It is important for the benefactor to let the beneficiaries know about the will early. This will eradicate confusion when you die.
Even after writing the will, revisit it regularly. Changes in life can necessitate altering the will. Of importance also is that you should also have alternate or secondary beneficiaries. In case the primary beneficiary in the will dies, the secondary one takes over. Keep your will documents up to date.
There are several categories of beneficiaries. First, we have the irrevocable beneficiary. Get legal counsel and financial advice before settling on an irrevocable beneficiary. This is because it is very difficult to change these beneficiaries once they have been included in the will. Then there are revocable beneficiaries. This one can be changed in case something happens in life. Beneficiaries can be altered due to things like marriage or divorce.
A primary beneficiary is defined as the person who is in line directly to receive your assets upon your death. Most insurance companies want to know the primary beneficiary. Contingent or alternate beneficiaries form another group of beneficiaries. This is the alternative beneficiary if the primary beneficiary was to die before getting the inheritance. Apart from the primary and the alternate, there are also residuary beneficiaries. These are named to get very particular items from the benefactors. Case in point is a grandmother gifting a specific jewel to a grandchild.
Residuary benefactors can also have alternate benefactors under them. A will can name many people. Most people prefer to name their spouses as primary beneficiaries. However, it is important to name an alternate beneficiary after the spouse. Children would be the ideal alternate beneficiaries after the spouse is named as the primary beneficiary. Most people do however name children as primary beneficiaries.
There are special cases where people name friends or charities as beneficiaries to their assets. These are just life choices. More information about wills can be found online for further reading. Generally, writing a will is very important since nobody knows when death will occur hence the importance of preparing in advance.