Your last will and testament is a legal document that lays out what should happen to your money, belongings, and other assets after you die. Someone who receives money or estate assets via a will is called a beneficiary. The person who creates the will (also called the testator) can name one beneficiary or multiple. They can also name a business, organization, or trust as a beneficiary. Testators can also opt to name a secondary beneficiary — someone to receive an asset in the event the primary beneficiary choice is unavailable or unwilling to receive their inheritance.
Choosing beneficiaries is a personal decision, so make the beneficiaries you name in your will align with your overall estate plan. For example, don’t forget to consider potential estate taxes or what will happen to your spouse’s estate when they die.
Who can be a beneficiary of a will?
You can name just about anyone can be the beneficiary of a will, or a combination of people, organizations (charitable or otherwise), businesses, or trusts. You can also name as many beneficiaries as you wish. You could divide up your property by percentage, or you could name people to receive specific assets.
However, in certain states, your surviving spouse or children may have special rights to receive your assets. If for any reason you think someone wouldn’t legally be able to receive an inheritance from you, talk with an estate planning attorney.
To ensure your named beneficiaries receive their inheritances, there are a few things to consider. Create your will with a reputable lawyer or an online service that uses attorney-approved tools because an improperly made will may not work as intended. It’s also important that your will clearly states who your beneficiaries are; be mindful of family members who have the same name, like someone whose names should include “Jr.” If you ever want to change your beneficiary, including cases where a beneficiary dies before you, don’t forget to either update your will with a codicil, which will create a new will that must contain language revoking previous versions of your will.
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Can an executor of a will be a beneficiary?
Yes, you can name the executor of your will as a will beneficiary. This is also very common. For example, many people name their spouse or a child as both the executor of their estate and a beneficiary in the will. As long as the executor could otherwise legally receive an inheritance from you (as most people can) then there’s no problem. For legal advice on your specific estate, it’s best to contact an estate lawyer.
Note that your executor can't change your will. Executors also have a fiduciary duty, meaning they cannot legally make decisions that go against the best interests of the deceased person’s estate.
What happens if you die without beneficiaries?
If you die without a will, your estate will be distributed to your heirs based on your state intestacy laws. If you have a will but your heir cannot receive their inheritance, a couple of things could happen. It’s possible that the inheritance of that beneficiary will pass to someone else as part of the residuary of your estate — everything you didn’t name a specific beneficiary for. If none of your will beneficiaries are eligible or still alive, your estate will likely be probated according to intestacy laws in your state.
To avoid dying without any eligible beneficiaries, name a secondary beneficiary (also called a contingent beneficiary to receive an asset if your primary beneficiary is unavailable. If you want to be extra careful, you can even name tertiary beneficiaries.
Other types of beneficiaries
It’s possible to name beneficiaries for many assets without going through your will. For example, bank accounts and retirement accounts allow you to make a beneficiary designation through the financial institution. Your money then transfers to that person upon your death. (Learn more about transfer-on-death accounts.) Similarly, a life insurance policy has a beneficiary who receives the death benefit after you die.
There’s no need to put something in your will if it already has its own beneficiary designation. That designation will supersede the will and the result may just be confusion and wasted time for your loved ones.
