What Is a Beneficiary?

A beneficiary is a person or organization you name in your estate plan to receive property after you die. You can name beneficiaries to receive property through your will, trust, life insurance plan, or financial account.

This article defines various types of beneficiaries and discusses strategies for naming primary and alternate (contingent) beneficiaries.

Types of Beneficiaries

When thinking about how to leave your property, you should be familiar with three types of beneficiaries: primary, contingent (also called alternate), and residuary.

What Is a Primary Beneficiary?

A primary beneficiary is the person or organization who is first in line to receive a particular asset after your death. You may name different primary beneficiaries for different types of property. For example, if you leave multiple assets through your will, you may name a separate primary beneficiary for each one. You can also name more than one beneficiary to be primary beneficiaries for a gift--you just have to clearly state how much of the gift each person should receive.

See below for how to name a primary beneficiary.

What Is a Contingent Beneficiary?

A contingent or contingency beneficiary, also called an alternate beneficiary, is next in line to inherit an asset if the primary beneficiary dies before you do or is otherwise unable to inherit. You can name a contingent beneficiary for every person you name as a primary beneficiary.

See below for a discussion of how to name a contingent beneficiary.

Less commonly, a contingent beneficiary could refer to a beneficiary who inherits only under specific conditions. For example, if you name your nephew to take property under a will only if he graduates from college, then your nephew is a contingent beneficiary because your gift is contingent on his graduation. However, this type of contingent situation is uncommon and usually not recommended.

What Is a Residuary Beneficiary?

A residuary beneficiary (sometimes mistakenly called a residual beneficiary) inherits property under a will or trust that hasn’t been specifically left to another beneficiary. For example, if Devon leaves a home to Jordan and the rest of their property to Jesse, then Jesse is the residuary beneficiary. A residuary beneficiary may also inherit any property for which both the primary and contingent beneficiaries have died. In a will, the residuary beneficiary will get any of your property that doesn’t have a named beneficiary (in or outside of your will). In a trust, the residuary beneficiary’s gift is limited to any trust property that does not go to another beneficiary you named in the trust.

Reasons to Name Beneficiaries

What to do with your property is up to you, but there are many good reasons to make an estate plan naming beneficiaries for what you own. Here are several:

• Documenting your wishes. When you name beneficiaries, you ensure that your property goes to the people or organizations you care about. This not only ensures your legacy; it goes a long way toward avoiding confusion, hard feelings, and even outright disputes among your heirs.
• Avoiding intestate succession and probate delays. If you die without a will or other documents naming beneficiaries, the court process that wraps up your estate will be longer, more complex, and potentially expensive.
• Providing financial security. If your loved ones are named as beneficiaries, they’re likely to get their inheritance sooner, especially if you designate them using forms provided by insurance companies and financial institutions.
• Saving tax dollars. Sometimes, naming a beneficiary can provide tax benefits. For example, naming a beneficiary for your retirement account may allow the beneficiary to spread out withdrawals, allowing the account to keep growing without taxes for a longer period. If you have a very large estate, you may be able to name beneficiaries in a way that lowers the taxable value of your estate. Additionally, you may be able to lower taxes by naming charitable beneficiaries.
• Saving probate dollars. Naming beneficiaries using methods that avoid probate can save your loved ones time, money, and headaches.

When you name beneficiaries, you are protecting your assets and the people and organizations you care about, making the process of settling your estate simpler and more secure.

Who Can Be a Beneficiary?

You can leave your property to whoever you want. That means that any person or entity that can benefit from your gift can be your beneficiary. Your beneficiaries can include:

• Family
• Friends
• People who’ve been helpful to you
• People who need the money
• Charitable organizations
• Universities
• Businesses
• Pets*
• Minors*

* Whether pets or minor children can be beneficiaries requires some additional discussion. While you can name both pets and minors as your beneficiaries, neither can legally own or manage the property themselves. Instead, you need to use your estate plan to appoint an adult to manage the property on their behalf. More on this below.

Where to Name Beneficiaries

Where you name beneficiaries depends on the type of assets and your wishes for it.

Naming Beneficiaries Under a Will or Trust

When making a will or trust, you may wish to keep things simple, naming just one person to receive everything you own, or you may want to name different beneficiaries for many different items of property. You can have as many beneficiaries as you want, whether they are individuals, organizations, or some combination of these. Just keep in mind that the more beneficiaries you name, the more important it is to make your wishes clear and keep them up to date.

When designating a beneficiary under a will or trust, be sure to:

• Identify the beneficiary clearly. Use the beneficiary’s full legal name and any other identifying information, such as their birthdate and relationship to you, that might help avoid confusion.
• Describe the asset. Be very specific about the asset, property, or share of your estate you are giving to the beneficiary. This may be an amount of money, a percentage of an asset or of your overall estate, a type of property (”all my jewelry”), or a specific item (”my platinum and opal wedding ring”).
• Name contingent beneficiaries. You don’t have to name alternate beneficiaries, but it’s always wise to do so. Your alternate will receive the property if your primary beneficiary is unable or unwilling to inherit.
• Name a residuary beneficiary. As discussed above, it’s a good idea to name a person or organization to get “everything else.”

Keep your language clear and ensure that you finalize your will or trust in accordance with the laws of your state. Check the links to learn more about how to make a will yourself or with the help of a lawyer.

Naming Beneficiaries of a Life Insurance Policy

The most common way to name a life insurance beneficiary is to inform the company that holds the policy who should get the proceeds of the policy when you die. This is typically done using the company's form, on paper or online. Most insurance policies let you name more than one beneficiary to share the proceeds, and some also allow you to name an alternate.

You can also name a trust as a life insurance beneficiary. If you do this, when you die, the life insurance company sends the policy payout to the trust. The trustee then distributes the funds according to your instructions. This method is more complex, but it can help if you have a complicated plan or want to control how beneficiaries use the funds.

Naming your estate as the beneficiary is also an option, but doing so will cause the proceeds of your life insurance to go through probate, which is almost always a bad idea.

If you want to name your trust or estate your life insurance beneficiary, get advice from an attorney first.

Naming Beneficiaries for Financial Accounts

Most financial institutions let you name a beneficiary when you set up your account or update your profile. This makes transferring assets simple and avoids probate. You can often name multiple or alternate beneficiaries. Contact each institution to learn about their process and any limits.

Like insurance policies (above), instead of naming people or organizations, you can name a trust or your estate as beneficiaries of your financial accounts. However, doing so makes things more complicated. Naming a trust gives you more control over how funds are distributed to beneficiaries, but it also requires you to set up a trust and name a trustee. Naming your estate as a beneficiary could be useful if you prefer the funds to be used by your estate (maybe to pay debts or taxes), but it will cause the funds to go through probate. If you do want to name a trust or your estate as beneficiary of a financial institution, get help from an attorney.

How to Name Beneficiaries

While you have almost complete control over who gets your property, the conventions for naming various types of beneficiaries do differ.

How to Name People as Beneficiaries

When naming people as beneficiaries, being clear and precise is key. You can use the name that appears on their birth certificate, but doing so is not required and may not be the clearest way to identify people. More important than using their given name is making sure there is no confusion. For example, if your father and son have the same name, you’ll want to include identifiers (like Sr. or Jr. or a nickname) that leave no question as to whom you’re referring.

Instead of using group names, such as “all my children,” “my stepdaughters,” or “my friends from swim club,” name each beneficiary individually. This may require you to update your estate plan more regularly, as people come in and out of your life, but that is better than leaving a vague gift that might create confusion.

If you do want to name groups or categories of beneficiaries, get help from an attorney who can help you craft clear and explicit language to define who’s included in the group or category.

How to Name Young Beneficiaries

When naming young beneficiaries, the most important thing to understand is that they cannot manage the property until they reach adulthood. For this reason, when you name minor beneficiaries, you must make a plan for who will manage the property in the meantime. In most cases, this means either naming a trustee, a custodian under the Uniform Transfers to Minors Act or a property manager.

How to Name an Organization as Beneficiary

In addition to naming people, you can name organizations, businesses, schools, associations, and other non-human entities. If the entity can own property, you can leave it a gift. For example, you might leave a gift to Doctors Without Borders, your school alumni association, your church, or a local food pantry.

As an incentive for being philanthropic, gifts you leave to nonprofits could qualify your estate for a charitable estate tax deduction.

When naming an organization or charity as a beneficiary, check carefully to make sure you use the correct and precise name. For example, you may need to name a specific chapter of your alumni association, or you might confuse one organization with another that has a similar name. The best way to ensure that you use the correct name is to contact the organization itself. They may have a donation or legacy department that will gladly help.

Some people want to specify how the gift will be used within the organization. For example, you may want to leave money to a local after-school program to build a new playground or set up a scholarship fund for kids who play the oboe. You can do this, but if you want the organization to be legally bound to your request, you need to do more than just name the organization in your will or trust. Get help from an experienced estate planning attorney who can draft language in your document that ensures your wishes are followed.

How to Name a Trust as Beneficiary

There are a few reasons you might want to name a trust as the beneficiary of your will or financial account. Primarily, trusts allow you to have more control over the gifts you leave. When you leave gifts directly to a beneficiary (without going through a trust), the gift is theirs with no strings or guardrails.

Naming a trust allows you to describe and control:

• how the beneficiary uses the gift
• when they get the gift outright, if ever, or
• methods for splitting the gift among beneficiaries.

These controls can be useful if your wishes involve:

• young beneficiaries who need property management
• beneficiaries of any age who cannot manage their own finances
• beneficiaries who receive government disability benefits
• complex beneficiary situations or relationships
• detailed distribution requirements, or
• any other situation in which you want to control when or how a beneficiary uses your gift.

Generally, to name a trust as a beneficiary, you use the name of the trustee of the trust, the name of the trust, and the date the trust was signed.

A gift in a will to a revocable living trust, this might look like:

• I give all of my Picasso prints to “Joany Smith as Trustee of the Hollander Family Revocable Trust, dated September 6, 2025.”

Filling in the name of a trust on the beneficiary designation of a bank account might look like:

• “Juan W. Suarez , as trustee of the Marcos F. Garcia Revocable Living Trust, dated 10/5/2024”

Some people name a trust as the beneficiary of a will to “pour” all property that passes through the will into the trust. Doing so is especially useful if you want one distribution plan for all of your property--from your will, financial accounts, life insurance, etc. You make a trust the vessel for all of your property, and the trustee distributes everything according to the terms of the trust.

Important warning: Any property that passes through your will goes through probate. So if your primary purpose for making a living trust is to avoid probate, having property pass through your will to the trust will not help with that goal. In that case, your estate plan should pass most of your property using probate-avoidance devices, without letting it go through your will.

How to Name Multiple Beneficiaries

You can name more than one beneficiary to share a gift. However, you need to be clear about how the gift should be split.

Simple Wishes

If you have a simple plan that divides a gift (or your entire estate) among your three children, you can simply state that each child should get one-third. This works even if the division is uneven, as long as the shares are clear. For example, “I give Jenny 40%,” “I give Zara 30%,” and “I give Abraham 30%.”

More Complicated Wishes

But if your wishes can’t be stated so clearly, things can get tricky fast. If you have many beneficiaries, or complicated ways that a gift should be split, or if you want there to be someone who can use discretion or judgment when splitting the gift, you’ll almost certainly need a trust (and a good attorney to help document your wishes).

Possible Conflicts Among Multiple Beneficiaries

Whenever you name more than one person to share a gift other than cash, carefully consider how the beneficiaries will do as co-owners. Will they want to hold on to the gift or sell it? What if they don’t agree? If you have any concerns about how this will go, make a plan that reduces potential conflict. This might mean requiring the object to be sold and the proceeds split, or it might involve leaving a gift in a trust that grants the trustee authority to manage the situation. If you have any concerns about possible difficulties among beneficiaries, get help from an attorney to set up guardrails ahead of time.

Making Suggestions for Splitting Gifts

If you don’t anticipate any strife among beneficiaries who will share a gift, you can leave suggestions about how to split the gift in a letter (separate from your will). Your suggestions won’t be legally binding, but they will give your beneficiaries an idea about what you would want. For example, if you have a large book collection that your grandchildren cherish, you could leave it for them to share, along with a letter suggesting that they have a party to divide the books by lottery.

How to Name Contingent Beneficiaries

When naming beneficiaries, it’s important to consider your primary vs. contingent beneficiaries. As noted at the top, primary beneficiaries are first in line to get a gift, but when the gift giver dies, if a primary beneficiary is not alive (or is not available or does not want) to take the gift, the contingent beneficiary will get it.

There can be many levels of contingent beneficiaries--and many ways to set them up.

First Contingent Beneficiaries

In a will or trust, naming a contingent beneficiary might look like this:

• I give my book collection to Agnes. If Agnes does not survive me, I give my book collection to Bernice.

Second Contingent Beneficiaries

You can also name a second level of alternate who will get the gift if both the primary beneficiary and the first contingent can’t

• I give my book collection to Agnes. If Agnes does not survive me, I give my book collection to Bernice. If neither Anne nor Bernice do not survives me, I give my book collection to Cassandra.

You can continue this pattern for third/fourth/fifth contingent beneficiaries, but there is usually no need to plan for so many people dying before you do.

Multiple Contingent Beneficiaries

You might want to name more than one person to share a gift if the primary beneficiary dies before you do. In that case, you’ll need to specify what shares each should get. Here’s what that might look like:

• I give my book collection to Agnes. If Agnes does not survive me, I give 40% of my book collection to Bernice and 60% of my book collection Brianne.

This kind of beneficiary plan is common when naming your child and then that child’s children (your grandchildren) as alternates.

This starts to get a little complicated when adding in additional levels of contingencies.:

• I give my book collection to Agnes. If Agnes does not survive me, I give 40% of my book collection to Bernice and 60% of my book collection Brianne. If neither Agnes nor Bernice survives me, I give Bernice’s share to Cassandra. If neither Agnes nor Brianne survives me, I give Brianne’s share to Carly.

As you can see, if you want to split one gift (or your entire estate) among multiple beneficiaries and include several levels of contingencies, your beneficiary provisions could become very complex.

As another option (that simplifies the provision a bit), instead of naming contingent beneficiaries for each primary beneficiary, you could have the contingent take the gift only if all primary beneficiaries don’t survive you.. This might look like:

• As to my book collection, I give 40% to Agnes, 30% to Aaron, and 30% to Anthony. If any of those beneficiaries do not survive me, I give the deceased beneficiary’s share to the surviving beneficiaries.

If You Do Not Name Contingent Beneficiaries

If you do not name alternates and a primary beneficiary dies before you, the gift the primary beneficiary would have received will go to your residuary beneficiary.

How to Name Residuary Beneficiaries

You can name residuary beneficiaries for your will and for your trust, and you can name different residuary beneficiaries for each. When you name the residuary beneficiary, consider who you would want to get any property that might not go to your will or trust’s primary or alternate beneficiaries. Keep in mind that the residuary beneficiary of your trust will be entitled only to property that is in your trust that does not go to a primary or alternate beneficiary. In contrast, the residuary beneficiary of your will is entitled to any property you own that does not have a primary or alternate beneficiary--not just property named in your will, but any property you own at your death. That means that if you inherit a lot of money right before you die, and you didn’t have time to update your estate plan to include those new funds, the entire inheritance will go to your residuary beneficiary.

More About Wills

For more information about wills, see the following articles:

• Different Types of Wills
• Why Do You Need a Will?
• What Is an Executor?
• Digital Assets and Estate Planning
• Spousal Inheritance Rights

You can find out more about making WillMaker’s will and living trust in WillMaker’s Legal Manual.