How to choose beneficiaries when planning an estate? How many beneficiaries can be designated? What are the precautions?

Selecting beneficiaries is a critical step in estate planning. It not only ensures your loved ones are well taken care of, but also helps you plan your personal legacy.

The following are the relevant instructions for beneficiaries⬇️

What is a beneficiary?

A beneficiary is a person or legal entity that you designate to receive your inheritance, including money, property, or other assets. Commonly found in insurance policies, a beneficiary is the recipient of insurance money, such as a death benefit. Types of beneficiaries include:

– Legacy

– Trust (managed by a trustee)

– Charity

– personal

– Multiple individuals

Primary and secondary beneficiaries

– Primary Beneficiary: The person or entity who is first in line to receive an estate, usually a spouse.

– Secondary Beneficiaries: Secondary beneficiaries inherit the estate if the primary beneficiary dies or cannot be contacted.

Frequently asked questions

1. What is a secondary beneficiary?

A secondary beneficiary is a secondary beneficiary who is second in line to receive the money if the primary beneficiary is unable to receive it.

2. What if a minor is the beneficiary?

It is recommended to avoid directly designating a minor as a beneficiary and instead appoint a trusted guardian or establish a trust to manage the minor’s estate.