Current Beneficiary Legal Meaning

See full definition of beneficiaries in the dictionary of English language learners A beneficiary is any person who derives an advantage and/or profit from something. In the financial world, a beneficiary generally refers to a person who is eligible to receive distributions from a trust, will or life insurance policy. The beneficiaries are either explicitly mentioned in those documents or have fulfilled the conditions which call them into question for the specified allocation. n. a broad definition of any natural or legal person (such as a charity) who is to receive assets or profits from an estate, trust, insurance policy or other instrument in which a distribution exists. There is also a «random beneficiary» or a «third party beneficiary» who receives a benefit even if it is not explicitly mentioned, for example: someone who makes a profit when one piece of land is distributed to another. (See: Secondary Beneficiary) The beneficiary is often used in conjunction with life insurance, but also appears in many other contexts. A college may be the recipient of a private donation. Your uncle`s will can make a church its sole beneficiary, in which case all his money and property will go to him when he dies.

A «third party beneficiary» of a contract is a person (often a child) whose contractholders (which is usually an insurance policy or benefit plan) want to benefit from it. More generally, a small business may benefit from changes in tax legislation, or a restaurant may be the beneficiary if it closes across the street and its entire volume of meals comes into play. What made you decide to look for beneficiaries? Please let us know where you read or heard it (including the quote if possible). When irrevocable beneficiaries are designated for a life insurance policy, the policyholder will need the consent of the beneficiary and any prospective beneficiary to make a change. For this reason, it is important to think carefully when choosing the beneficiaries of the policy. Britannica.com: Encyclopedia article on the «beneficiary». Merriam-Webster.com Dictionary, Merriam-Webster, www.merriam-webster.com/dictionary/beneficiary. Retrieved 6 December 2020. If the beneficiary is an estate or trust, the distribution rules are more limited. Any proceeds given to the estate are also subject to the estate. Thesaurus: All synonyms and antonyms for beneficiary An irrevocable beneficiary is permanent.

If there are multiple beneficiaries designated for a life insurance policy (e.g., a primary beneficiary and multiple potential beneficiaries), they will all have to accept any changes involving an irrevocable beneficiary. Eligible pension plans, such as a 401(k) retirement account or an individual retirement account (IRA), give the account holder the option to designate a beneficiary. After the death of the eligible plan holder, a beneficiary spouse may be able to transfer the proceeds into their own IRA. If the beneficiary is not the spouse, there are three different allocation options. As a general rule, any natural or legal person may be designated as the beneficiary of a trust, will or life insurance policy. The person distributing the funds or the benefactor may set different conditions for the disbursement of the funds, such as: if the beneficiary reaches a certain age or is married. There may also be tax consequences for the beneficiary. For example, although the principal of most life insurance policies is not taxed, accrued interest may be taxed. Note: A trust may provide that a person (as a spouse) receives income for life and then the capital is paid to another person. A trustee is sometimes allowed to distribute a portion of the trust`s capital to an income beneficiary if this is necessary to support the beneficiary, if the beneficiary`s support was the purpose of the trust.

Nglish: Beneficiary Translation for Spanish Speakers If you have been designated as a beneficiary of an unqualified pension, you should talk to an accountant or other tax professional about the possible tax implications. These sample sentences are automatically selected from various online information sources to reflect the current use of the word «beneficiary». The opinions expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us your feedback. Minor children cannot receive the proceeds of a life insurance policy directly, but you can designate a trust or your children`s legal guardian as the beneficiary. The first is to make a flat-rate distribution that makes the entire amount taxable on the basis of the beneficiary`s ordinary income. The second is to establish an inherited IRA and withdraw an annual amount based on the beneficiary`s life expectancy, also known as an «extensible IRA». The third option is to withdraw the money at any time within five years of the date of death of the original account holder.

In the case of a life insurance policy that has one or more revocable beneficiaries, the policyholder may change the beneficiary designations at any time. This may be necessary if a beneficiary dies or if the primary beneficiary is a spouse and the marriage is divorced. The proceeds of life insurance are considered tax-free for the beneficiary and are not reported as gross income. However, any interest received or accrued is considered taxable and will be reported like all other interest received. Unmatched annuities are considered tax-deferred investment vehicles that allow owners to designate a beneficiary. After the death of the owner, the beneficiary can be held responsible for all taxes on the death benefit. Unlike life insurance, pension benefits are taxed as ordinary income on profits in excess of the initial amount of the investment. For example, if the original account holder purchased a $100,000 annuity and died while the value was worth $150,000, some or all of the profits of $50,000 may be taxed as ordinary income for the beneficiary.

Beneficiaries of life insurance can be individuals, such as an adult spouse or child, or businesses, such as a trust. For example, if you have minor children, you can create a trust and name it as the beneficiary of your life insurance policy. If you die, the death benefit from the policy would be paid to the trust. The trustee would then be mandated to manage these assets on behalf of its beneficiaries (e.g., your children) in accordance with the terms of the trust. When an insurance company enters into a reinsurance contract with another insurance company, it is called contract reinsurance. Description: In the case of contractual reinsurance, the company that sells the insurance policies to another insurance company is called a transferring company. Reinsurance frees up the capital of the transferring company and helps to increase the solvency margin. It also allows.

An organization or person for whom a trust is created and who thus receives the benefits of the trust. The one who inherits under a will. A person who is entitled to an economic interest or a right to profit, to benefit from or to benefit from a contract. On Thursday, Diljit Dosanjh and Ranaut fought a fierce battle on Twitter. The Accidental Death and Dismemberment Benefit is an additional benefit paid to the policyholder in the event of death in an accident. The dismemberment benefit is paid if the insured dies or loses his limbs or his sight in the accident. Description: In the event of death, the insured receives the additional amount specified in these benefits in the insurance policy. It is the additional beneficiaries of life insurance that can be revocable or irrevocable.