Estate plans allow you to create a cohesive, step-by-step plan for what occurs after you die. It allows you to designate what happens to all of the assets you worked to build up over your lifetime. There are numerous legal aspects of it, including the difference between an heir and a beneficiary. Your estate planning attorney can help you determine which to use in your specific situation. A Los Angeles family law attorney at Martin Family Law Group can answer your questions.
What is an Heir?
An heir is something that is entitled to your estate. An heir receives or inherits from you if you die intestate. That means you die without a will that outlines what is to be done with your assets. Most of the time, this is your closest family members, such as your spouse, children, parents, and siblings.
The law in your area will specifically state which order is first on the list to inherit from you. In short, your heirs are outlined by the court. If you do not have a trust or will in place to tell the court otherwise, they will use this process to divide your assets.
What is a Beneficiary?
A beneficiary is a person you name to inherit your assets. This is a person that you list in your will or trust to obtain ownership of your assets if and when you die.
What makes a beneficiary different from an heir beyond this is that they do not have to be any relation to you in any way. They can be any person you choose to benefit from your assets. It could even be a company, a nonprofit, a charity, or even your pet.
What is The Difference Between Beneficiaries and Heirs?
- Naming: You get to name the beneficiaries on your will or trust. This gives you the most control over them. If you name no one, then the court decides what happens to your assets.
- Your assets: Your assets go to the person named as a beneficiary if you have one. This gives you more control over supporting organizations or financial needs based on what is best for you.
In many situations, a person may believe it is easy enough to just let the heirs inherit. However, if you have someone or something that is more important to you, you should put that in writing. For example, you may not want to leave funds to the sibling you no longer speak to. By contrast, you may want to be sure that your stepchild, who is not considered equal in all ways to your biological child, receives an equal share of your assets.
Every situation is very different, and it is wise to speak to your estate planning attorney to determine which plan is best suited for your specific needs. Most importantly, set up a time to speak to an attorney and learn how easy it can be for you to obtain a will that allows you to remain in complete control over what occurs with your estate after your death. Heirs are fine, but only if that is truly who you want to inherit.