Beneficiary Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Beneficiary, written in plain English, along with examples of how it is used.
What is Beneficiary?
(n) Beneficiary is the person named or otherwise identified in a document to receive the benefit from a property, trust, business, agreement etc on the occurrence or non occurrence of the events contained in that document. In third party beneficiary the beneficiary is not named in the document.
History and Definition of Beneficiary
The term "Beneficiary" has its roots in the Latin word "beneficiarius" which means "having received a favor". It refers to a person or organization that is designated to receive benefits, usually financial, from a will or trust, an insurance policy, retirement account or other such asset.
In legal terms, a beneficiary is a person or entity that is named or otherwise identified in a legal document to receive the benefit from a property, trust, business, agreement, or other document, on the occurrence or non-occurrence of specific events. In cases where a third party beneficiary is involved, the beneficiary is not named in the document.
Examples of Beneficiary
- John created a trust and named his son as the beneficiary of the trust. The trust holds investments and real estate, and the son will receive the proceeds of the trust upon John's death.
- Mary took out a life insurance policy and named her husband as the primary beneficiary, with her children as contingent beneficiaries if her husband predeceases her.
- The company's retirement plan designates its employees as beneficiaries of the plan, which provides retirement savings and pension benefits to eligible employees.
Legal Terms Similar to Beneficiary
- Trustee - a person or organization that holds and manages assets for the benefit of a beneficiary.
- Executor - a person appointed to administer the estate of a deceased person; may have the responsibility of distributing assets to beneficiaries.
- Fiduciary - a person or entity that has legal and ethical obligations to act in the best interest of another party; often refers to a trustee or executor.