Define beneficiary.

A beneficiary is a person or entity that is entitled to receive the benefits or proceeds from something, such as a trust, will, insurance policy, or retirement account. In the context of a trust, the beneficiary is the person or entity that the trust is set up to benefit. In the context of a will, the beneficiary is the person or entity that is designated to receive the assets of the estate. In the context of an insurance policy or retirement account, the beneficiary is the person or entity that is designated to receive the proceeds in the event of the policyholder's death or the retirement account owner's death.

Beneficiaries are usually chosen by the person setting up the trust, will, insurance policy, or retirement account, and they can be individuals, organizations, or charities. It is important to carefully consider and choose the beneficiaries of these types of documents and accounts, as they will ultimately be the ones who receive the benefits or proceeds.

Here are a few more important points to consider when it comes to beneficiaries:

It is possible to name more than one beneficiary for a trust, will, insurance policy, or retirement account. For example, you could name your spouse and your children as beneficiaries of your life insurance policy.

In some cases, you can specify how the benefits or proceeds will be distributed among the beneficiaries. For example, you could specify that your spouse will receive 60% of the proceeds of your life insurance policy, and your children will each receive 20%.

If you do not specify a beneficiary for a trust, will, insurance policy, or retirement account, the assets or proceeds may be distributed according to state laws. This is known as "intestate succession," and it can result in the assets being distributed in a way that you may not have intended.

It is generally a good idea to review your beneficiaries on a regular basis, particularly if you have experienced any major life changes, such as getting married, divorced, or having children. This will ensure that your assets or proceeds are distributed according to your current wishes.

In the case of a trust, the beneficiary does not have to be the same person as the trustor, who is the person who sets up the trust. The trustor can set up the trust to benefit someone else, such as a child or a charity.

It is possible to name a contingent beneficiary, who is a secondary beneficiary who will receive the benefits or proceeds if the primary beneficiary is unable to do so. For example, you could name your spouse as the primary beneficiary of your life insurance policy, and your children as the contingent beneficiaries.

In the case of a trust, the beneficiary does not have to be a person. The trust can be set up to benefit an organization, such as a charity, or even a pet.

In some cases, you may want to name a trust as the beneficiary of your assets or proceeds. This can be useful if you want to set up specific terms or conditions for the distribution of the assets or proceeds, or if you want to provide ongoing financial support for a particular individual or organization.

It is generally a good idea to consult with an attorney or financial advisor when setting up a trust, will, insurance policy, or retirement account, as they can help you to understand your options and ensure that your documents and accounts are set up properly.