What Are Beneficiaries, and How Do You Choose Them?

Estate Planning Lawyer

Most of us have seen a movie or show where a character passes away and then beneficiaries come together to hear about what assets they have inherited from the deceased. But, what exactly are beneficiaries? And are they chosen, or based on law and their relation to the person who passed? Here, we have aimed to answer these inquiries: 

Who Beneficiaries Are

Beneficiaries are people who receive a piece of someone’s estate after passing on. A beneficiary can be a person or organization that is named in legal documents (such as a life insurance policy or will). More than one beneficiary can be listed, and they don’t have to all be relatives. Examples of beneficiaries are listed as follows: 

  • The trustee for a trust you’ve established
  • One person or multiple individuals
  • Close friends
  • Family members
  • A minor (under 18 years of age)
  • Charity or nonprofit

As the person giving assets away, you are referred to as the benefactor. Since it is your belongings, you can set conditions on when and how someone receives the inheritance. But, you must be specific about who is to receive which assets. 

Why a Beneficiary Is Needed

If you do not have an estate plan prior to death, then your assets are likely to be handled by the government based on state intestacy laws. Most people and their families would prefer to not have the court system have a hand on their estate. So, it’s recommended that they contact a lawyer for assistance on how to prevent the state from interfering with the distribution of assets when the time comes.  

Thinking about a time when you are no longer here with loved ones is not the most fun tasks. However, it’s imperative to protect your assets by contacting an estate planning lawyer from Kaplan Law Firm when drafting or making changes to your estate plan documents. 

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