beneficiary

play
noun ben·e·fi·cia·ry \ˌbe-nə-ˈfi-shē-ˌer-ē, -e-rē, -ˈfi-sh(ə-)rē\
Updated on: 26 Jul 2017

Definition of beneficiary

plural

beneficiaries

  1. 1 :  a person or thing that receives help or an advantage from something :  one that benefits from something the main beneficiaries of these economic reforms

  2. 2a law :  the person designated to receive the income of an estate that is subject to a trust (see 1trust 3a)b :  the person named (as in an insurance policy) to receive proceeds or benefits (see 1benefit 3b) named her husband as the sole beneficiary of her life insurance policy

beneficiary

adjective

Examples of beneficiary in a Sentence

  1. The college was a beneficiary of the private grant.

Recent Examples of beneficiary from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'beneficiary'. Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

Did You Know?

Beneficiary is often used in connection with life insurance, but it shows up in many other contexts as well. A college may be the beneficiary of a private donation. Your uncle's will may make a church his sole beneficiary, in which case all his money and property will go to it when he dies. A "third-party beneficiary" of a contract is a person (often a child) who the people signing the contract (which is usually an insurance policy or an employee-benefit plan) want to benefit from it. In a more general way, a small business may be a beneficiary of changes to the tax code, or a restaurant may be the beneficiary when the one across the street closes down and its whole lunch crowd starts coming in.

Origin and Etymology of beneficiary

see benefice


Financial Definition of BENEFICIARY

beneficiary

What It Is

A beneficiary is any person or organization that receives assets from a person after that person’s death.

How It Works

A will is a legal document that indicates how a person wants his or her estate (money and property) to be distributed after death. A will may also describe any wishes for funeral and burial arrangements, and it may designate guardians for minor children.

When the testator (the person who created the will) dies, the executor, who is named in the will, administers the distribution of the estate to the beneficiaries. An executor administers the distribution of an estate to beneficiaries.

Wills aren’t the only things that have beneficiaries. Insurance policies also often have beneficiaries (particularly life insurance and annuities).

It is important to note that a testator or insured person can change a beneficiary at almost any time, for any reason, and should keep the original copy of the related documents in a safe place. A copy should also be given to the executor.

Why It Matters

Naming a beneficiary of your assets is part of the process of estate planning. However, court procedures, called probate, are often required to pass assets from a deceased person to beneficiaries, because the testator is no longer around to sign deeds and other documents necessary to transfer the assets.

Without naming beneficiaries to your financial assets, relatives can spend a lifetime (and their life savings) battling over your assets, friends and nonblood relatives can get entirely ignored, and former spouses could bequeath your assets to their children from other marriages. This may be what you intended, but without an adequate estate plan, you can never be sure. It can be intimidating, but it is a necessary step to ensuring that your assets end up where you want them, without the interference of the Internal Revenue Service or third parties.


BENEFICIARY Defined for English Language Learners

beneficiary

play
noun

Definition of beneficiary for English Language Learners

  • : a person, organization, etc., that is helped by something : someone or something that benefits from something

  • : a person, organization, etc., that receives money or property when someone dies


BENEFICIARY Defined for Kids

beneficiary

play
noun ben·e·fi·cia·ry \ˌbe-nə-ˈfi-shē-ˌer-ē\

Definition of beneficiary for Students

plural

beneficiaries

  1. :  a person who benefits or will benefit from something


Law Dictionary

beneficiary

play
noun ben·e·fi·cia·ry \ˌbe-nə-ˈfi-shē-ˌer-ē, -ˈfi-shə-rē\

Legal Definition of beneficiary

plural

beneficiaries

  1. :  a person or entity (as a charity or estate) that receives a benefit from something (as a will or other instrument or legal agreement): as a :  the person or entity named or otherwise entitled to receive the principal or income or both from a trust — compare settlor, trustee contingent beneficiary :  a beneficiary that may receive proceeds from a trust depending on the occurrence of a specified event (as the death of another beneficiary) income beneficiary :  a beneficiary that according to the provisions of a trust is to receive income but not the principal of the trust Editor's note: A trust may provide for income to be paid to someone (as a spouse) for his or her lifetime and then for payment of the principal to another person. A trustee is sometimes allowed to distribute some of the principal of the trust to an income beneficiary when necessary for the support of the beneficiary if support of the beneficiary was the purpose of the trust. b :  the person or entity named by the insured of a life insurance policy to receive the proceeds upon the insured's death contingent beneficiary :  a beneficiary named to receive the insurance proceeds if the primary beneficiary has died —called also secondary beneficiary primary beneficiary \ˈprī-ˌmer-ē-, -mə-rē-\ :  a beneficiary named to receive the insurance proceeds before any other secondary beneficiary \ˈsek-ən-ˌder-ē-\ :  contingent beneficiary in this entry c :  a person or entity entitled under a letter of credit to demand payment from the issuer of the letter d :  a person or entity that benefits from a promise, agreement, or contract; especially :  third-party beneficiary in this entry the contractual beneficiaries…are mortgagees and investors — Key Pac. Mortg. Inc. v. Industrial Indem. Co., 845 P.2d 1087 (1993) creditor beneficiary :  a direct beneficiary whom the party paying for the other party's performance intends to benefit as payment for a debt or obligation — compare donee beneficiary in this entry direct beneficiary :  a third-party beneficiary to a contract whom the parties to the contract intended to benefit — compare incidental beneficiary in this entry donee beneficiary :  a direct beneficiary whom the party paying for the other party's performance intends to benefit as a gift or donation incidental beneficiary :  a third-party beneficiary to a contract whom the parties to the contract did not intend to benefit — compare direct beneficiary in this entry third–party beneficiary :  a person or entity that is not a party to but has rights under a contract made by two other parties



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