Many power of attorney forms allow for a variety of options in designating who may act as your agent. Depending on the rules of your state, this can be one person or more than one person.
Estate Planning Basics: What Is a Beneficiary to a Will?
People create wills to establish what happens to their money and assets when they pass away. In these estate planning documents, they can name beneficiaries – individuals who will receive money, other assets, or specific bequests like sentimental items upon the person’s death.
Are Beneficiaries Heirs?
Both beneficiaries and heirs can inherit money and assets when someone dies. While beneficiaries can be the decedent’s family, they do not have to be related to the person who made the will. Beneficiaries can also be friends, charity organizations, or other entities; they are specifically named in a person’s will.
In the event that a person dies without an estate plan, their legal heirs acquire their assets according to state law. Heirs include relatives – such as spouses, children, and parents – and exclude friends and organizations.
A person can choose their beneficiaries, but not their heirs. With a will, an individual can disinherit an heir who would have otherwise received a portion of their estate under state law. Until your death, you can change your will, adding and removing beneficiaries.
How Do I Know if I’m a Beneficiary?
If a close loved one drafted a will, they might have told you that you are a beneficiary. Or, you may find out after someone dies that they left you with something.
When an estate has sufficient value, the will must go through probate. Some assets can pass outside of probate, such as pay-on-death bank accounts. A will encompasses the remaining assets that the decedent left to beneficiaries. During probate, the court validates the will and approves the executor, who distributes the assets.
Who Contacts Beneficiaries?
After the probate court validates the will, the personal representative must notify all beneficiaries. The personal representative, or executor, carries out the wishes of the person who made the will.
How Are Beneficiaries Notified?
The executor prepares a Notice of Appointment form. They then send it to everyone interested in the estate, including beneficiaries, heirs, and creditors. The form provides the personal representative’s name and address as well as the probate court overseeing the matter.
How Long After a Person Dies Will Beneficiaries Be Notified?
State laws govern the probate of estates. The length of time it takes to receive the personal representative’s notice will therefore depend on your state. Many states require executors to notify beneficiaries within two or three months after the court validates the will and appoints them.
State laws also require those possessing wills to file them with the court within a set timeframe after a person’s death – for instance, 30 days.
How Long Does it Take to Receive Your Inheritance?
How long it takes for you to obtain a bequest depends on several factors. This may include the complexity of the estate and the type of inheritance you receive, according to the American College of Trust and Estate Council.
Straightforward estates may take six months to conclude. Resolving the estates of people who left behind significant assets and multiple accounts and investments can take years.
The type of bequest can also affect how long it takes to receive the distribution of your share. When drafting wills, people can make specific bequests to individuals, gifting objects or sums of money. For example, a grandmother might leave her grandchild her jewelry.
In a will, you may opt to give beneficiaries the residuary estate, or a portion of it. The “residuary” is everything left after satisfying creditors and transferring specific bequests.
For instance, suppose a man makes certain bequests to his sons and leaves the remainder of his estate to his brother. The brother must wait until the personal representative satisfies all debts and the sons receive their shares. It can therefore take longer for residuary beneficiaries to receive their property.
What if You Are Not a Beneficiary But Have an Interest in the Estate?
Sometimes, individuals expect a loved one’s will to name them and are surprised when they receive nothing. You may intend to disinherit a specific heir, such as an estranged child. In this case, you can avoid any potential confusion by explicitly stating in your will that the heir receives nothing.
Perhaps you have a large net worth but wish to effectively disinherit an heir. You may opt to leave that individual a smaller portion of the estate than other heirs. You might then include a provision in your will known as a no-contest clause. This clause states that the heir receiving less would lose their share entirely if they challenged the will in court.
In other cases, an invalid will can appear to disinherit a person contrary to the testator’s intent. A greedy individual might have unduly influenced the person who made the will. Perhaps the testator lacked the requisite mental capacity to execute the document. Interested individuals can raise legal challenges when they suspect a will is invalid.
Disinherited surviving spouses can also bring legal challenges. When a person disinherits their spouse, certain statutes give spouses the right to recover a portion of their estate. Many states require a spouse’s consent for their partner to write them out of their will.
Contact your attorney to learn more about naming beneficiaries or receiving an inheritance.