Contingent beneficiary

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Contingent Beneficiary

In wills and insurance, a beneficiary who receives the benefit in case the primary beneficiary dies or is otherwise unable to receive the benefit. In cases where the primary beneficiary is mentally incapacitated, a contingent beneficiary is often named to ensure that assets are used to help the primary beneficiary. Attorneys commonly recommend that wills include at least one contingent beneficiary, and sometimes a list of successive contingent beneficiaries so as to remove any ambiguity.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Contingent beneficiary.

A contingent beneficiary receives the proceeds of an insurance policy, term-certain annuity, individual retirement account (IRA), employer-sponsored retirement savings plan, will, or trust if the primary beneficiary dies before the benefit is paid or if he or she declines to accept the benefit.

For example, if you name your spouse as the primary beneficiary of your IRA, you might name your children as contingent beneficiaries. Then, if your spouse is not alive at your death, your children inherit your IRA directly.

It's often a good idea to name as contingent beneficiary someone who is younger than you and your primary beneficiary, increasing the chances that the contingent beneficiary will outlive you. Or, if you choose, you might name an institution or a trust as contingent beneficiary.

You have the right to change your designation of contingent beneficiaries, except in the case of an irrevocable trust or a life insurance policy whose terms and conditions were established in a court ruling.

A contingent beneficiary may also be someone who is entitled to inherit assets if he or she meets the terms of the will or trust granting those assets.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
The contingent beneficiary would be eligible to serve on the board if they become a current beneficiary, after the death of the spouse who previously was the sole current beneficiary of the trust.
For instance, a contingent beneficiary will receive nothing if the primary beneficiary is alive when the insured dies.
(15) The contingent beneficiary remained in the name of Sharon Zulkiewski.
Except for Schuber's designation of the annuity's contingent beneficiary, Neasham viewed the transaction as straightforward--one of many the veteran life insurance agent had carried out of a popular product since it became widely available the same year.
You just have to name CLF as beneficiary or contingent beneficiary after your spouse.
If a clearly named contingent beneficiary is used, there would be no problem; if no contingent beneficiary is named, the estate is normally the beneficiary.
The most important rule in this subset states that the age of the oldest trust beneficiary at the account owner's death, whether the special needs beneficiary or any contingent beneficiary, will be the measuring life for determining the rate at which retirement funds must be distributed to the trust and, therefore, taxed.
If a Crummey trust provides for a contingent beneficiary to succeed to the interest of the primary beneficiary in the event of the primary beneficiary's death before the trust terminates, the primary beneficiary's failure to exercise his withdrawal right acts as a transfer to the contingent beneficiary, either at the time of the lapse of the withdrawal right or at the time of the primary beneficiary's death.
(9.) But see NKS Distributors, Inc v Tigani, 2010 WL 2011603 (Del Ch 2010) (unpublished) (holding that communications were privileged because the contingent beneficiary "more closely resembled an adverse party," where the communications related to how the trustee should "deal with problems" that the trustee believed the beneficiary was causing).
Contingent beneficiary--A contingent beneficiary is one whose bequest is reliant on some occurrence outside the control of the transferor.
The authors have found few instances where allowing the policyowner's estate to dispose of insurance proceeds (by default in not naming a contingent beneficiary) is advantageous in comparison to shifting wealth directly through the insurance contract.
The donor may choose to name a charity as the primary or contingent beneficiary of the account.

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