Rights of Primary Beneficiary Vs. Contingent Beneficiary

By Heather Frances J.D.

You can’t take your assets with you when you die, but you can create an estate plan to leave them to your loved ones using a will, trust or other legal structure. Certain types of assets, such as life insurance, are even transferable directly to another person without going through any complicated processes after you die. However, your loved ones typically do not have a right to your assets while you are still alive.


Generally, beneficiaries are individuals who may inherit assets under your will, trust, retirement account, life insurance policy or annuity. Charities can also be beneficiaries, but your beneficiary must have the legal ability to accept your bequest. For example, you cannot leave money directly to a pet since your pet does not have a legal ability to accept the money. If you name a child or legally incompetent adult as your beneficiary, a court may appoint a guardian or conservator to manage the money for your beneficiary until he becomes able to manage it for himself.

Primary Beneficiary

The person or entity you designate as a primary beneficiary is the first in line to inherit assets when you pass away. You can name more than one primary beneficiary for an asset, which means those beneficiaries split that asset when you die. For example, if you have a $100,000 life insurance policy, you can name your daughter as the sole primary beneficiary, meaning she gets the entire $100,000, or you could name your daughter and son both as primary beneficiaries, meaning they each receive $50,000. You can also divide the inheritance unevenly between your primary beneficiaries, perhaps giving your daughter $60,000 and your son $40,000.

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Contingent Beneficiary

Some contingent beneficiaries inherit only if your primary beneficiaries cannot be located, if they refuse the inheritance or if they die before you do. In other words, these beneficiaries are second in line behind your primary beneficiaries and inherit nothing as long as your primary beneficiaries accept their inheritance. For example, if you name your daughter as the primary beneficiary on your life insurance policy and your son as the contingent beneficiary, your daughter receives the entire $100,000 if she is alive when you die, and your son receives nothing. If your daughter dies before you, your son receives the entire $100,000. By attaching conditions to your gift, you can also create contingencies that keep your beneficiary from inheriting unless he meets certain qualifications. For example, you could establish your son as your beneficiary, but attach a restriction that he can only inherit when he completes college or marries. Similarly, you could leave your home to your daughter, but require her to live on that property for a certain length of time before receiving full rights to it.

Changing Beneficiaries

Beneficiaries do not have rights to your assets while you are still alive, so you are free to change your beneficiary designations at any time. If you marry or divorce, you may wish to review the beneficiary designations on your life insurance policies, retirement accounts, bank accounts and any other assets. Changing your beneficiary is usually a simple matter of completing a form provided by the company that manages each asset. Your state’s laws may invalidate or change certain beneficiary designations in your will upon marriage, divorce or the birth of a child, but it is generally a good idea to draft a new will instead of relying on state law to direct where your assets go.

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What Is a Surviving Primary Beneficiary?

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