Different Types of Beneficiaries

American Investment Planners LLC

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Are you in the process of naming a beneficiary? When it comes time to determine who will receive some type of financial benefit upon your passing, you may have several people in mind. And though you may think that you can only list one person, the good news is that there are a few types of beneficiaries that need to be selected, and in some cases you can even choose multiple people! What do we mean, you ask? See below to learn more:

Primary beneficiary:

The primary beneficiary is your absolute first choice when it comes to who will receive your assets. However, if you can't decide on just one person (or charity, estate or trust), you may have the opportunity to select a few - in this case, your assets will be equally divided among those that are named. Keep in mind, though, that if you do choose multiple primary beneficiaries, you will also have to make a plan for what will happen if one of them passes before you or cannot be found. For example, will the remaining beneficiary(s) receive all of your assets? Or will they be given to someone connected to the beneficiary who is no longer able?

Contingent beneficiary:

Once you have chosen the primary person(s), charity or trustee that you want to claim your assets, you'll need to name someone else who can in the event that your primary beneficiary is unavailable. For example, if your primary beneficiary has passed before you, your contingent beneficiary will take their place. Similarly, if your primary beneficiary is unable to be found at the time of your passing, your assets will be moved to whom or what you named as your contingent.

For more information about primary and contingent beneficiaries, please click here.

As one of the nation's largest and most respected independent financial planning firms in the country, we at American Investment Planners LLC have all of the information you need when it comes to estate planning and naming beneficiaries. For help in this area, please give us a call at (516) 932-5130 to start speaking with our team today.