Beneficiary Designation 101

Facing the death of a loved one is hard. The process of moving on is a painful process. But with the need to get on with your life comes the necessity to arrange the legal proceedings that your deceased friend or family member has left behind. One of these proceedings include the will of testament and the beneficiary designation.

The will of testament is a testimony of a person which he or she created, through a lawyer, prior to the event of his or her death. It is a probate process that entails several complications.

Contrary to common belief, a will of testament is not superior to a beneficiary designation because the properties and assets of the deceased will automatically go to his or her beneficiaries. The only time that the will of testament will be used is when an asset or a property does not have a beneficiary.

A beneficiary is defined as a person who is to receive the properties and assets left behind by the contract owner's death. There are basically two types of beneficiaries:

Primary beneficiary

These are the contract owner's first choice beneficiaries. Primary beneficiaries may be assigned by the contract owner to several people. If a contract owner chooses three primary beneficiaries, this means that three individuals will receive three fair shares of the contract owner's properties and assets.

Contingent beneficiary

These are the beneficiaries that are not assigned by the contract owner. Contingent beneficiaries are the ones who are bound to receive the share of the properties and assets of the primary beneficiary who has already died.

Moving on after the death of a loved one will understandably take time and effort. It's not easy to pick up the pieces of your life and surge forward without looking back. But before resorting to such melodrama, make sure that you know basic stuff about beneficiaries and wills.

Otherwise, the hard-earned assets of the deceased friend or family member may not be put in the hands of the people that he or she wants to take care of financially.