Beneficiaries of Wills – What to Know
Most people do not like thinking about their death. However, this is a reality of life that we cannot wish away. It is for this reason that writing a will is important. Writing a will starts with naming your dependents. Dependents can be different people ranging from family members to friends. It is also important for dependents to understand the will and how to translate its 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. Sometimes the beneficiary is a minor which means that they will wait to reach legal age to get the benefits in the will. 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. Changes in life can necessitate altering the will. 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. Always ensure your will documents are up to date.
There are several categories of beneficiaries. The first one is the irrevocable beneficiary. Seek advice of your attorney and financial advisor before naming irrevocable beneficiaries. This is because it is very difficult to change these beneficiaries once they have been included in the will. Then there are revocable beneficiaries. It is possible to alter revocable beneficiaries. 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. Insurance companies will always ask for this person first. The other group of beneficiaries is the 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. 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. After naming the spouse, it is good to name the alternate beneficiary. A good choice here would be the children. Most people do however name children as primary beneficiaries.
There are special cases where people name friends or charities as beneficiaries to their assets. You make this call. You can get more info about wills and beneficiaries online and grow your knowledge appropriately from this site. The fact that we never know when death will come to us means that writing a will early is of vital importance.