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What does it mean to be a beneficiary?

On Behalf of | Dec 16, 2019 | Estate Planning, Uncategorized |

After the death of a loved one, many Texas residents find it comforting to learn that their family member left something behind for them. In some cases, the assets could be of value, or they could be sentimental. Whatever the case, individuals are often keen on obtaining the bequests intended for them.

Of course, if you believe that you are a beneficiary, you may want to remember that there are different types of beneficiaries and that you may not necessarily stand first in line to obtain a particular asset. If the probate process for your loved one’s estate is about to begin, you may want to know what that means for you as a possible beneficiary.

Beneficiaries in general

In general, a named beneficiary is a person designated by an account holder or property owner to receive the assets associated with the account or property. In order for the designation to have legal ties, the designation needs to have taken place by using the applicable legal document, which can be a will in some cases.

When it comes to distributing assets to beneficiaries, some individuals may have to wait until the end of the probate process to receive their bequests, and others may obtain assets earlier if they do not have to go through probate. For instance, if a person is the named beneficiary of a retirement account, the funds in that account will pass directly to the beneficiary without needing probate.

Types of beneficiaries

When it comes to the different types of beneficiaries, the designations often indicate who is first to receive certain assets. For example, the primary beneficiary is the person or entity who has first claim to the specified assets. A contingent beneficiary or secondary beneficiary is a person or entity named to collect the assets if the primary beneficiary cannot or will not accept the assets.

It may also be important to note that a person could name multiple beneficiaries to the same account or asset. As a result, the beneficiaries would each receive a portion of the assets.

Your rights during probate

If you believe that your loved one named you as a beneficiary to his or her estate, you have rights during the probate process. The executor has the obligation of keeping you informed about the progress of the case and other important matters associated with the closing of the estate. If you have concerns or questions about probate or being a beneficiary, you may benefit from speaking with an attorney.