You’re planning on making a will. With the use of this legal document, you can instruct how your estate should be handled after you pass away. This document contains a list of your assets and an executor of the estate. Typically, the main focus of this document is to have your assets distributed to family members and friends.
To do this, it’s important to understand the difference between the terms “heirs” and “beneficiaries.” These two terms will help decide who can inherit from an estate. Confusing these terms could create difficulties as your estate is distributed. Here’s what you should know:
Understanding the difference between “heirs” and “beneficiaries”
Simply put, an heir and beneficiary are both parties who may have a claim over assets in an estate. However, these terms are not used in the same manner.
An heir is someone who can claim assets in an estate if there is no will. If there is no will, then the decedent has died intestate. During intestate proceedings, it’s the responsibility of the state to manage the decedent’s estate, which includes locating and contacting heirs. An heir is the closest living family member to the decedent, which may include a spouse, child, adopted child, sibling or other relative.
An heir may not necessarily be someone whom the decedent wanted to benefit from their estate. A beneficiary can help with that issue. A beneficiary is a party named in a will who has the right to benefit from an estate. The testator can name anyone as their beneficiary. A beneficiary may include a spouse, child, godchild, friend, business partner or charity, for example.
Dying without a will or naming beneficiaries may lead to actions that go against your last wishes. Ensuring that your estate plan is in order may require legal guidance.
