What Is a Contingent Beneficiary?

A contingent beneficiary is the designated recipient of an inheritance only if the person named as the primary beneficiary has d🌊ied, cannot be located, or refuses the inheritance when the estate i♚s settled.

A contingent bene🔯ficiary, in addition to a primary beneficiary, may be specified in a will, an insurance con🔴tract, or a retirement account.

A contingent beneficiary is entitled to insurance proceeds or retirement assets only if certain predetermined conditions are met at the time of the insured’s death, such as information found in a will.

How a Contingent Beneficiary Assignment Works

A contingent beneficiary will receive nothing if the primary beneficiary accepts an 澳洲幸运5官方开奖结果体彩网:inheritance.

Virtually any conditions may be cited for a contingent beneficiary of a will. For example, say Cheryl lists her spouse, John, as the primary beneficiary for her 澳洲幸运5官方开奖结果体彩网:life insurance policy, with their two children named as cꦚontingent beneficiar🌺ies.

If Cheryl dies, John receives the insurance payout, and 🌸the children receive nothing. If John predeceases Cheryl, their ch♔ildren each receive half of the proceeds.

Characteristics of Contingent Beneficiaries

Contingent benef🔥iciaries can be people, organizations, estates, charities, or trusts.

Minor children do not have the legal power to accept assigned assets. If a minor is listed as a beneficiary, a legal guardian is appo📖inted to oversee the money until the minor reaches legal age.

Although it’s more common for contingent beneficiaries to be 澳洲幸运5官方开奖结果体彩网:immediate family mem🐬bers, close friends and oth🧜er relatives are often listed as well.

Multiple contingent beneficiaries may be listed on a life insurance policy or retirement account. Each beneficiary ღis designated a specific percentage of the mꦉoney, adding up to 100%.

A contingent beneficiary who inherits will receive the assets in the same manner stated for the primary beneficiary. For example, if a primary beneficiary is to receive $1,000 per month for 10 years, a contingent beneficiary who inherꦓits will receive payments in the same way.

Remember To Update

Continge🐷nt beneficiaries, like primary beneficiaries, need to be reviewed and updated after major life changes such as marriage, divorce, birth, or death.

For example, afte๊r Chris and Rain divorce, Chris updates her life insurance policy so their child, River, is the primary beneficiary, and their other child, Riley, is the contingent beneficiary. Chris thus has successfully blocked Rain from receiving Chris’ life insurance proceeds.

Benefits of Naming Contingent Beneficiaries

Naming a contingent beneficiary for a 澳洲幸运5官方开奖结果体彩网:life insurance policy or retirement account helps one’s family avoid unnecessary time and expenses related to probate. Probate is🀅 the legal process of distributing a deceased person’s assets when there is no will.

For example, Uni lists their chil🐷dren’s stepparent, Alex, a💯s the primary beneficiary and Uni’s favorite charity as the contingent beneficiary for their life insurance proceeds. Even if Alex dies before Uni, Uni’s children cannot fight over their life insurance benefits because Uni listed the charity as the contingent beneficiary.

Other Conditions

A life insurance policyholder or retirement account owner can create 澳洲幸运5官方开奖结果体彩网:contingenciesᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ preventi🃏ng an inheritance without meeting certain qualifications.

For example, an 澳洲幸运5官方开奖结果体彩网:individual retirement account (IRA) owner could establish a trust as beneficiary with terms imposing a condition that the contingent beneficiary child may only inherit the money after they complete college.

The Bottom Line

As lo💦ng as you have a valid will and your accounts are up to date, your contingent beneficiaries are unlikely to inherit. However, naming them is important to protect your family from even the remote possibility of an adverse event.