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LCO Law, LLC

Beneficiary Designations

About Beneficiary Designations

What does it mean to be a beneficiary? 

Well, let’s talk a little bit about a beneficiary versus an heir. An heir is a person who benefits from your estate as dictated by local and federal law when no will or trust is available. Does it go to your children? Does it go to your spouse? How often and what percentage? Those are heirs. 

Beneficiaries are very different. Beneficiaries are the people that you choose to receive, and be the beneficiaries of your estate, either in life or in death.

Beneficiary designations in an estate plan refer to the individuals or entities designated to receive specific assets or benefits upon the death of the person creating the estate plan. These designations are typically made through legal documents such as a will, trust, or life insurance policy. Examples of assets that may have beneficiary designations include life insurance policies, retirement accounts, and bank accounts with “payable on death” or “transfer on death” designations. Beneficiary designations can also be made for specific items such as jewelry or artwork. The purpose of beneficiary designations is to ensure that the assets are distributed according to the wishes of the person creating the estate plan, rather than being subject to the laws of probate.

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