Beneficiaries of Wills – What to Know
To most persons, thinking about death is an abomination. It is however impossible to ignore death as a reality of life. It is for this reason that writing a will is important. Writing a will starts with naming your dependents. Very many different people can be the dependents. It is important though to let them know of the contents.
A beneficiary is the person who is named in a will to benefit from the assets of the person who wrote the will. The beneficiary is named as a successor of an estate, investment or even insurance policy. In case the beneficiary is a minor, he or she will wait to reach legal age to inherit the property. The benefactor should tell the beneficiaries about the will early. This way, there will be no confusion one he or she passes on.
A written will should be revisited once in a while. Changes in life can necessitate altering the will. Do also have alternate beneficiaries, also called secondary beneficiaries. In case the primary beneficiary in the will dies, the secondary one takes over. Keep your will documents up to date.
Beneficiaries fall in different categories. The first category has irrevocable beneficiaries. Consult your attorney and financial advisor before settling on an irrevocable beneficiary. Irrevocable beneficiaries are very difficult to change. The second type is the revocable beneficiary. This one can be changed in case something happens in life. Beneficiaries can be altered due to things 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. In case there is death of the primary beneficiary, then the contingent beneficiary stands to inherit the properties. Another group is that of 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.
Point to remember is that residuary beneficiaries can also have alternate residuary beneficiaries in place. People to be named in a will are many. A lot of people prefer to have their spouses as beneficiaries. After naming the spouse, it is good to name the alternate beneficiary. Children fit this part perfectly. 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.