One of the most important aspects of writing a will is choosing your beneficiaries—that is, the people named in your will to receive your property. The beneficiary of a will is also called an inheritor or "devisee."
For some people, naming beneficiaries is simple. This is especially true for those who want “everything to go to my spouse” or “everything to be divided evenly among my three children.” However, for others, the process of choosing beneficiaries can be trickier. Read on for some aspects to consider as you decide how to leave behind your legacy.
Who Can Be a Beneficiary?
You can leave your money and property to pretty much anyone you like (but not pets). Some common beneficiaries include:
- Your spouse
- Children and grandchildren
- Other relatives
- Friends
- Organizations, such as churches and universities
- Charities
However, some states have laws that protect your spouse from being completely disinherited. (So if you left nothing to your spouse in one of these states, your spouse would have the right to claim some of your property anyway.) Florida also protects minor children by giving them a claim to the family home.
Your Spouse
If you're married, it's helpful to know the laws in your state surrounding what your spouse is entitled to inherit. Most common law states (which are the states that are not "community property" states, defined below) protect spouses from being either forgotten or completely disinherited. In these states, your spouse can contest the will if you leave your spouse a smaller portion of your property than what's required by state law. The amount required by law is often called the "elective share" and is usually between one-third and one-half of your property, depending on the state.
Community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) don’t have these spousal protections because spouses share earnings during the course of the marriage. In these states you can leave your separate property and your portion of community property to whomever you wish.
Your Children
Legally, your children include any children born to you or adopted by you. For will-making purposes, your step-children are not your children in the eyes of the law unless you have adopted them (or possibly if you have raised them as your own). If you have questions about whether or not a person is legally your child, get help from a lawyer—the legal status of this relationship could have a significant impact on who gets your property.
In almost every state, you don't have to leave anything to your children. One exception is Florida, where minor children may have a right to receive at least an interest in the family home.
Most states do, however, have laws that protect children from being accidentally forgotten. So if you do want to disinherit a child, you should do so explicitly—so that there is no question about whether you might have left them out of your will by mistake. The best way to explicitly disinherit a child is to name the child in the will and to state that you leave that child nothing.
Minor Beneficiaries
If you leave property to beneficiaries who are under 18, you'll need to name someone you trust to manage the property until the beneficiary is no longer a minor. The most common ways to do this are:
- Naming a custodian under the Uniform Transfer to Minors Act (UTMA) for those gifts. The young person will receive the gifts outright at an age that ranges from 18 to 25, depending on the state. The UTMA is available in every state.
- Leaving the gift in a trust. In your will, you set up a trust that will go into effect when you die. The trustee you name will manage the property while the minor is young, and will distribute the property outright when the minor reaches an age you determine. You can make children’s trusts in any state.
If you don’t provide a method of property management for the property you leave to minors, the probate court will appoint someone, and it might not be the person you would've chosen.
Other Beneficiaries
You can leave property to any person or organization. Just make sure you describe the beneficiary in terms that will make it clear who the intended recipient should be. (See Naming Beneficiaries, below.)
Your Pet Cannot Be a Beneficiary
Although your pet might seem like a family member, your pet is considered to be your property under the law. This means that you can't use your will to leave property to your pet (because your pet can't own property). It also means that you can use your will to leave your pet to someone else.
If you do leave your pet to someone else, consider leaving that person some money as well, to cover your pet’s expenses. There will be no way to ensure that the person will use the money for that purpose, but hopefully named someone you trust.
If you want more insurance that your pet will be well cared for when you die, consider creating a pet trust. In the trust, you name a trustee and describe how you want the pet to be cared for, and then you “fund” the trust with enough money to care for your pet. To create a pet trust, first learn more, then see a lawyer for help.
Types of Beneficiaries in a Will
The beneficiaries named in your will can fall into one of the following categories:
- Primary beneficiary. This is the person who you want to receive specific property that you identify in the will.
- Contingent beneficiary. This is your back-up beneficiary, also known as your alternate beneficiary. This person is second in line to receive specific property you identify in your will. If your primary (first-choice) beneficiary dies before you do, the property will go to the named contingent beneficiary.
- Residuary beneficiary. Wills usually contain a catch-all section that takes care of any property not specifically named in the will. (If your will doesn't include this, it should.) The residuary beneficiary receives the "residue" of your estate—the remainder of what you own after everything listed in the will is given away.
You can always name more than one beneficiary for a gift in your will. For example, you can give your home to your three children, or the money in your bank account to two separate people. You can also name multiple contingent beneficiaries, as well as multiple residuary beneficiaries. If you don't want to split the gift equally among them, be sure to specify what percent or fraction you want each beneficiary to receive.
Naming Beneficiaries in Your Will
When you name a beneficiary in your will, use a clear and precise name that will be easily understood by the people who read your will. You should also name an alternate (second-choice) beneficiary, in case your first-choice beneficiary dies before you.
When you name a person as beneficiary, use the full legal name. You can also add the person’s relationship to you (like “spouse,” “friend,” or “brother”) or an “AKA” (also known as) for nicknames or former names.
For an organization like a church or school, contact the organization’s giving department to find out what name they want you to use. If it’s a big organization—like a state school—the particular name you use could have an effect on their taxes and on how they can use the money. If you have any specific wishes for the money—for example, if you want your gift to be used to build a new fountain or for tuition assistance—get help from an attorney to help you make sure your wishes can and will be followed.
You can also leave your executor a separate letter that provides additional information about your beneficiaries. In that letter, you could provide each person’s full name, address, birthdate, and relationship to you. An important reason to do it this way (instead of putting this information in your will) is that when your will is admitted to probate after you die, it becomes a public document.
Update your will as your circumstances change due to marriage, divorce, a move to a different state, or the death or birth of a beneficiary.
If You Do Not Name Beneficiaries
If you don't name beneficiaries for your property—either in a will or through other estate planning tools—state law determines who will get your property. This is called dying intestate. Intestacy laws give your property to your closest relatives, like your spouse, children, parents, or siblings. The exact order of priority depends on your state.
Questions for Your Attorney
- Can my family members challenge my will if they don’t like it?
- How can I provide financial stability for my wife, while also passing my property onto my children from a prior marriage?
- Can I leave property to a charity or school with conditions of my choosing, such as how my gift is to be used?