Beneficiaries of Wills – What to Know
People fear talking about death. 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. There are many people who can be the dependents. It is important though to let them know of the contents.
The definition of a beneficiary is the person who is in line for inheritance upon death of the owner of the will. The successor to an estate or other assets is the beneficiary. Sometimes the beneficiary is a minor which means that they will wait to reach legal age to get the benefits in the will. It is important for the benefactor to let the beneficiaries know about 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. In case the primary beneficiary in the will dies, the secondary one takes over. Keep your will documents up to date.
There are different types of beneficiaries to be considered as you write your will. The first one is the irrevocable beneficiary. 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 one can be changed in case something happens in life. For instance, factors like marriage or divorce.
A primary beneficiary is basically the person who receives the money once you die. This person is of interest to most insurance companies. Contingent or alternate beneficiaries form another group of beneficiaries. 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 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. 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.
It is also possible to have charities and friends as beneficiaries in your will. You make this call. 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.