Beneficiaries of Wills – What to Know
Most people do not like thinking about their death. Death is however a reality of life that must be accepted. This is the reason why it is important to write a will so that your dependents can be comfortable when you leave this world. Writing a will starts with naming your dependents. 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 defined as the person named in the will to inherit the property. 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 avoids confusion upon death.
After writing your will, make it a habit to revisit and review it regularly. Changes in life can necessitate altering 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. Keep your will documents up to date.
Beneficiaries fall in different categories. The first one is the irrevocable beneficiary. Get legal counsel and financial advice before settling on an irrevocable beneficiary. It is very difficult to change the identified irrevocable beneficiaries. 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. Insurance companies will always ask for this person first. Contingent or alternate beneficiaries form another group of beneficiaries. 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. An example is when a grandmother assigns a particular jewel to a grandchild.
Point to remember is that residuary beneficiaries can also have alternate residuary beneficiaries in place. There are many people who can be named as beneficiaries in a will. A lot of people prefer to have their spouses as beneficiaries. However, it is important to name an alternate beneficiary after the spouse. A good choice here would be the children. Most people do however name children as primary beneficiaries.
It is also possible to have charities and friends as beneficiaries in your will. These are just life choices. More information about wills can be found online for further reading. The fact that we never know when death will come to us means that writing a will early is of vital importance.