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 why you are advised to write a will early in life. To write a will, start by identifying your dependents. Dependents can be different people ranging from family members to friends. Of importance is to ensure they know in advance.
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. As the benefactor, let the beneficiaries be aware of the will early. This avoids confusion upon death.
After writing your will, make it a habit to revisit and review it regularly. There are life changes that can lead you to change the content of 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 category has irrevocable beneficiaries. 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. 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. The other group of beneficiaries is the contingent or alternate beneficiary. This is the alternative beneficiary if the primary beneficiary was to die before getting the inheritance. 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.
Residuary benefactors can also have alternate benefactors under them. People to be named in a will are many. The spouse is the most preferred person by most people. The alternate beneficiary should be named after naming the spouse. Children would be the ideal alternate beneficiaries after the spouse is named as the primary beneficiary. To many other people, children are primary beneficiaries.
It is also possible to have charities and friends as beneficiaries in your will. 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.
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