Very early in the estate planning process, you will be asked to select one or several people in your newly-crafted will or trust to pass your assets and other belongings to after you die. This is called a beneficiary, though you may have also heard the term “heir” thrown around. Trust us when we say there is a distinct difference between the two.
While a beneficiary can be an heir, it is not always that way depending on your unique circumstances.
Heir and beneficiary: what’s the difference?
This is someone you are related to by blood. This is a son, daughter, or even a surviving sibling. It also includes your spouse. An heir can also be a beneficiary and listed in a will, and the odds are pretty high that they will be since most people’s beneficiary list is exclusively comprised of one or several family members.
This person does not have to be related to you. It could be a friend, coworker, or organization such as a charity or nonprofit. It may be surprising that you have so many options when it comes to naming beneficiaries, but that is the beauty of having your wishes carried out the right way.
So, why is understanding the difference between an heir and a beneficiary so important? Well, let us say that your father passes away without a will or trust. In this scenario, there are not any specific beneficiaries listed anywhere. But there are heirs, all of whom are entitled to a distribution of an asset or property in the absence of a will. Therefore, the probate court will get involved and distribute the estate according to surviving heirship, if available.
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When it comes to estate planning, you need a trusted estate planning attorney to guide you through each stage and work diligently to achieve a result that will give you peace of mind moving forward. The Nelson Law Group brings nearly two decades of experience in estate planning to each and every case.
Give our knowledgeable staff at Nelson Law Group, PC a call if you have any further questions regarding this or any other issue. Give us a call today! For more information about Brett A. Nelson, click here.