Rights of Heirs vs. Rights of Beneficiaries

There is a lot to know about estate planning, and you may wonder about heirs and beneficiaries. When planning your estate, you should know that these two terms are not the same and should not be used interchangeably. What inheritance rights do each have and how do they differ?

What is an Heir?

Broadly speaking, an heir is a person entitled to some or all of a deceased person’s estate due to their relationship to the deceased person. Only individuals related by blood, marriage, or adoption can be heirs.

Heirs are determined by law and not by choice. Heirs come into play when there is no will or trust in place and the state has to determine who is entitled to the person’s assets.

There are many different categories of heirs. Some common ones include:

• Heirs-at-law. Also known as statutory heirs, these people inherit under state intestacy laws when there is no valid will. They typically include spouses, children, parents, and siblings in order of priority.
• Primary heirs. These are the closest relatives, such as the spouse and children. They often stand to inherit, whether or not a will is in place.
• Collateral heirs. If there are no primary heirs, inheritance may pass to collateral heirs, which include more distant relatives such as parents, siblings, nieces and nephews, grandparents, aunts, uncles, and cousins.

Heirs do not always inherit something. If there is a will of trust in place, an heir is not necessarily entitled to a deceased person’s assets. A person can leave money and other assets to non-relatives and leave out their spouse and children.

What is a Beneficiary?

Unlike an heir, a beneficiary needs to be specifically named in a will, trust, bank account, or insurance policy in order for them to receive a deceased person’s asset. The beneficiary does not have to be a relative. It can be a friend, charity, distant cousin, or even an organization. To be clear, beneficiaries are chosen by the deceased through estate planning documents, not by default law.

It is possible for someone to be both an heir and a beneficiary. For example, a spouse or child are considered heirs under intestacy law and may also be named as beneficiaries in a will or trust.

It is also possible that there are no heirs or beneficiaries. A deceased person may have no estate plan in place and they may also have no living relatives. In this situation, the estate goes to the state.

Seek Legal Help

While heirs are entitled to an estate due to relationship, beneficiaries are specifically chosen by the owner of a will or trust. This means you want to ensure your estate plan has the appropriate details in place to avoid confusion and conflicts.

Disputes can arise when wills and trusts are unclear. Fort Lauderdale probate litigation lawyer Edward J. Jennings, P.A can effectively resolve your estate planning matter. To schedule a consultation, call 954-764-4330 or fill out the online form.

Source:

trustandwill.com/learn/heir-v2s-beneficiary