Beneficiary

A beneficiary is typically someone who is the designated recipient of the benefits from someone else’s property (usually monetary), which can come in the form of life insurance policies, bank accounts, brokerage accounts, or a retirement account, to name a few. 

In other instances, a business account or corporation can also have a beneficiary of a trust, where any marginal gains or profit earned goes to the family trust and eventually to the corporate beneficiary. In short, beneficiaries in businesses are the recipients of the money and assets of the said business, where they can be a person or organisation.

This is why, in most cases, beneficiaries tend to be the benefactor’s (someone giving away their property and its benefits) acquaintance and someone they know and trust. Some beneficiary examples include family, friends, trusts, and guardians. Choosing a beneficiary assures the benefactor that their financial properties are in the best care after they are gone. 

There are two main types of beneficiaries: 

• Primary: These beneficiaries are the first in line to receive financial benefits from the benefactor. While other names may be listed as beneficiaries, the primary person will receive all assets in one account. 
• Contingent: Think of the contingent beneficiary as the backup or the second person in line to receive these financial benefits passed down from the benefactor. They will only receive the benefits if the primary beneficiary has passed away or cannot be found. It is possible to list down more than one contingent beneficiary and determine how to distribute assets. 

Beneficiaries can’t just be anyone, so ensure you take the time to choose these designated individuals and gather the necessary documents to ensure everything is to carry on your legacy for generations to come.