Beneficiaries of Wills – What to Know
People fear talking about death. Death is however a reality of life that must be accepted. This is why you are advised to write a will early in life. Knowing your dependents is the first step in writing the will. Dependents can be different people ranging from family members to friends. Of importance is to ensure they know in advance.
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 will end up inheriting the estate stated in the will. In case the beneficiary is a minor, he or she will wait to reach legal age to inherit the property. As the benefactor, let the beneficiaries be aware of the will early. This will eradicate confusion when you die.
After writing your will, make it a habit to revisit and review it regularly. There are life changes that can lead you to change the content of the will. Of importance also is that you should also have alternate or secondary beneficiaries. This means that if the primary beneficiary was to die, the secondary ones will inherit your assets automatically. Always ensure your will documents are up to date.
Beneficiaries fall in different categories. First, we have the irrevocable beneficiary. 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. It is possible to alter revocable beneficiaries. Things like marriage or divorce can call for alteration of beneficiaries.
A primary beneficiary is basically the person who receives the money once you die. Most insurance companies want to know the primary beneficiary. Then there is a contingent or alternate beneficiary. This is the alternative beneficiary if the primary beneficiary was to die before getting the inheritance. Others are residuary beneficiaries. These are persons named to receive specific items from the benefactor. Case in point is a grandmother gifting a specific jewel to a grandchild.
It is also possible to name alternate residuary benefactors for residuary benefactors. There are many people who can be named as beneficiaries in a will. The spouse is the most preferred person by most people. 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. To many other people, children are primary beneficiaries.
There are special cases where people name friends or charities as beneficiaries to their assets. It is a personal choice. More information about wills can be found online for further reading. In conclusion, it is important to write your will early since we never know what will happen next in life.
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