Estate Planning: What Are Beneficiaries?

When you fill out your 401(k) forms, life insurance applications, and other important financial documents, you will be asked to designate your beneficiaries.

Who are these individuals, what role do they play, and why are they so important to note on your financial forms? They are very important, so it’s essential to make sure you name your beneficiaries – and select the right people.

What Is a Beneficiary?

First of all, it’s important to know what a beneficiary is. This is a person – or even an entity – whom you want to receive your benefits or property. This is typically given as part of your inheritance upon your death.

To ensure the right relatives or loved ones receive your assets, you will usually be asked to name a beneficiary on your life insurance policy, bank accounts, retirement accounts, and other financial and legal documents.

Naming a beneficiary assures you that the right people will receive your money and property when you die. This lets you control your inheritance – and will make it easier on your loved ones upon your passing.

An important thing to note about beneficiaries is that those listed as a beneficiary on a specific retirement or financial account are not impacted by changes you make to a will. Your beneficiary on one of these documents takes precedence over what’s listed in your will.

Another important difference is beneficiaries on your specific accounts remain private – unlike wills, which are made public.

Types of Beneficiaries

There are two main types of beneficiaries – primary and contingent.

  • Primary: A primary beneficiary is the main person on your account who will receive the assets. As far as your insurance company or financial institution is concerned, this is the individual they will transfer the funds to.
  • Contingent: A contingent beneficiary is a second person listed on your accounts. This person will only receive your assets if the primary beneficiary is deceased or cannot be located.

How To Choose Your Beneficiary

Because your beneficiary will inherit all of your assets, it’s essential to name the right person.

When you select this person, you should keep these tips in mind:

  • Determine which of your loved ones can use the financial boost.
  • Consider people outside of your family whom you want to provide financial support for. This could include a caregiver or a care facility.
  • Think about organizations that are important to you that could use financial contributions.

How To Name a Beneficiary

So, how do you name a beneficiary? It’s actually very easy. When you open a new bank account, retirement plan, or insurance policy, you will be asked to designate your beneficiaries. You can take a few days to think about whom you want to list, but it’s essential to ensure you complete the paperwork and provide the person’s name and any other information requested. Make sure you sign the paperwork and return it to the company.

Why Hire Us

When you need an estate planning attorney to help name your beneficiaries, let the experts at Johnstone Adams LLC represent you. We can ensure your trust is created the way you want, and your trustees are properly taken care of. We will also ensure your legal forms have the correct names of those whom you want to leave your financial assets to.

Ranked in the 2022 U.S. News – Best Lawyers® “Best Law Firms” list regionally in 12 practice areas, we have experts in many areas of law to give our clients top-notch representation. In business for more than a century, our firm can mix its experience with the ability to evolve with the changing times.

To get started, contact us at 844-682-7682 or

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