Beneficiaries of Wills – What to Know
To most persons, thinking about death is an abomination. However, this is a reality of life that we cannot wish away. This is the reason why it is important to write a will so that your dependents can be comfortable when you leave this world. Knowing your dependents is the first step in writing the will. Dependents can be different people ranging from family members to friends. 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 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. The benefactor should tell the beneficiaries about the will early. This avoids confusion upon death.
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. Of importance also is that you should also have alternate or secondary beneficiaries. If the primary beneficiary dies, the secondary one takes over. Keep your will documents up to date.
There are several categories of beneficiaries. The first category has irrevocable beneficiaries. Consult your attorney and financial advisor before settling on an irrevocable beneficiary. It is very difficult to change the identified irrevocable beneficiaries. The second type is the revocable beneficiary. This category of beneficiaries can be altered. For instance, factors like marriage or divorce.
A primary beneficiary is defined as the person who is in line directly to receive your assets upon your death. 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. Apart from the primary and the alternate, there are also residuary beneficiaries. These are named to get very particular items from the benefactors. An example is when a grandmother assigns a particular jewel to a grandchild.
It is also possible to name alternate residuary benefactors for residuary benefactors. A will can name many people. A lot of people prefer to have their spouses as beneficiaries. 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.
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. Generally, writing a will is very important since nobody knows when death will occur hence the importance of preparing in advance.