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 the reason why it is important to write a will so that your dependents can be comfortable when you leave this world. Writing a will starts with naming your dependents. There are many people who can be the dependents. Of importance is to ensure they know in advance.
A beneficiary is defined as the person named in the will to inherit the property. The beneficiary is named as a successor of an estate, investment or even insurance policy. Sometimes the beneficiary is a minor which means that they will wait to reach legal age to get the benefits in the will. The benefactor should tell the beneficiaries about the will early. This will eradicate confusion when you die.
After writing your will, make it a habit to revisit and review it regularly. Life brings about many changes hence the need to review a will regularly. Do also have alternate beneficiaries, also called secondary beneficiaries. This means that if the primary beneficiary was to die, the secondary ones will inherit your assets automatically. Keep your will documents up to date.
Beneficiaries fall in different categories. The first category has irrevocable beneficiaries. Seek advice of your attorney and financial advisor before naming irrevocable beneficiaries. Irrevocable beneficiaries are very difficult to change. Then there are revocable beneficiaries. This one can be changed in case something happens in life. For instance, factors like marriage or divorce.
The person who is designated to receive property when you die is the primary beneficiary. Insurance companies will always ask for this person first. Then there is a contingent or alternate beneficiary. If the primary beneficiary dies before inheriting the property, the contingent beneficiary gets the assets. Others are residuary beneficiaries. Residuary beneficiaries get very unique and specific items stated by the benefactor. An example is when a grandmother assigns a particular jewel to a grandchild.
Point to remember is that residuary beneficiaries can also have alternate residuary beneficiaries in place. A will can name many people. The spouse is the most preferred person by most people. After naming the spouse, it is good to name the alternate beneficiary. Children would be the ideal alternate beneficiaries after the spouse is named as the primary beneficiary. To many other people, children are primary beneficiaries.
It is also possible to have charities and friends as beneficiaries in your will. You make this call. More information about wills can be found online for further reading. The fact that we never know when death will come to us means that writing a will early is of vital importance.
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