There are a lot of complex terms to learn when planning an estate. As a testator, it can help to learn about terms like power of attorney, executor of the estate or child guardian. However, when making a will, you may want to begin by learning the difference between “beneficiaries” and “heirs.”
Beneficiaries and heirs are both people, often relatives, who may have a legal claim over your assets after you pass away. However, these terms aren’t used interchangeably even though they may seem similar. Here’s what you should know:
People who are entitled to your assets if there is no valid will
Many people die without a valid will, which is called intestate. Without a will, it’s unclear who would benefit from an estate. As a result, an heir can have a legal claim over assets. An heir can be the closest relative to the testator, typically a spouse. If there’s no spouse, then assets may go to a child, adopted child, sibling, parent or next of kin. It’s often recommended to have a valid will because it’s not always clear who would benefit from an estate if a will was lacking.
Naming someone to inherit from your estate
The biggest advantage to having a will is naming beneficiaries. A beneficiary is someone who has a legal claim over a testator’s assets because the testator wished it to be so. The testator can name nearly anyone to benefit from their estate, such as a spouse, sibling, child, friend, coworker or charity. The testator can also name a primary beneficiary who has the first legal claim over assets and the remaining assets can go to contingent beneficiaries.
To learn more about estate planning, you may need to reach out for legal help.