Most people do not like thinking about their death. However, this is a reality of life that we cannot wish away. It is for this reason that writing a will is important. 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.
The definition of a beneficiary is the person who is in line for inheritance upon death of the owner of the will. 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. It is important for the benefactor to let the beneficiaries know about the will early. This will eradicate confusion when you die.
Even after writing the will, revisit it regularly. There are life changes that can lead you to change the content of the will. Consider having alternate beneficiaries in the will. 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.
There are several categories of beneficiaries. The first category has irrevocable beneficiaries. Get legal counsel and financial advice before settling on an irrevocable beneficiary. It is very difficult to change the identified irrevocable beneficiaries. On the other hand, there are revocable beneficiaries. This category of beneficiaries can be altered. Things like marriage or divorce can call for alteration of beneficiaries.
The person who is designated to receive property when you die is the primary beneficiary. Insurance companies will always ask for this person first. 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. Apart from the primary and the alternate, there are also residuary beneficiaries. Residuary beneficiaries get very unique and specific items stated by the benefactor. Case in point is a grandmother gifting a specific jewel to a grandchild.
Point to remember is that residuary beneficiaries can also have alternate residuary beneficiaries in place. People to be named in a will are many. Most people prefer to name their spouses as primary beneficiaries. However, it is important to name an alternate beneficiary after the spouse. Children fit this part perfectly. To many other people, children are primary beneficiaries.
Friends and charities can also be named as beneficiaries. You make this call. 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.
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