Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
What is a beneficiary?
A beneficiary typically refers to a person or entity who receives the death benefit of a life insurance policy. However, you can also name beneficiaries for retirement and investment accounts, property or other assets using a will or trust.
Beneficiaries can be people, charities or even a trust. Naming a beneficiary is an essential part of estate planning; if you don't name one, your loved ones could go through a time-consuming court process called probate to determine where your assets go.
» MORE: Best online will makers
If you’re a benefactor — the person who owns the assets — you can specify how your assets should be distributed, including requiring a beneficiary to reach adulthood before receiving property.
How to choose a beneficiary
You can choose one beneficiary or split your assets among multiple beneficiaries. You don’t have to leave everything to one person.
You can name a contingent beneficiary (sometimes called a secondary or alternate beneficiary). This person inherits your assets if the primary beneficiary — usually a spouse or someone else who would suffer financially if you died — dies before you do . Life insurance and retirement accounts often require you to name a contingent beneficiary.
Your state of residence or insurance provider may restrict whom you can name as a beneficiary for life insurance. In some states, you may have to list your spouse as your primary beneficiary and allocate at least 50% of the benefit to them; in some places, you’ll need your spouse’s written permission to name someone else as a beneficiary on the account.
You can designate a trust as a beneficiary. A trust is a separate legal entity that gives you greater control over the distribution of your assets and can help you navigate tricky estate situations, such as naming a minor or dependent as the beneficiary.
You can name a charity or nonprofit organization as a beneficiary to receive all or part of your assets.
Your beneficiary can be revocable or irrevocable. You can change a revocable beneficiary without the beneficiary’s permission if the policy owner (the benefactor) is still alive. An irrevocable beneficiary can’t be changed without first getting written permission from the beneficiary. If there are multiple beneficiaries, all parties must consent to any changes. Irrevocable beneficiaries may be required as part of a divorce settlement or other special circumstances.
» Deciding on a beneficiary? Here’s what else to consider
How to designate a beneficiary
It’s a good idea to designate beneficiaries for all your important assets. Here’s how:
For insurance and other accounts, the provider will usually ask you to name a beneficiary when you open the account, but you can fill out a form online or in person to designate or change beneficiaries at any time. Contact your insurance provider or financial institution to request the necessary forms.
Provide as much information as possible to avoid future confusion or legal conflict. Include your beneficiaries’ Social Security numbers and full names, especially if you have a complicated family situation, such as an ex-spouse or adopted children.
» Ready for estate planning? Here’s how to get started
How to change a beneficiary
Generally, you can change your beneficiaries at any time. It’s good to review your will after a significant life event, like a marriage, divorce, death of a loved one or the addition of children or grandchildren. Here’s how to make changes, depending on the account:
On a life insurance policy, you can change your beneficiaries by contacting your insurance provider. You may have to fill out a form to confirm your change. Your policy may state whether you named a beneficiary revocable or irrevocable. You will need your beneficiary’s consent to change their status if irrevocable.
With a financial account like a retirement or investment account, contact the financial institution. If you receive benefits through your employer, you’ll likely have the opportunity to revisit your policy choices during the annual enrollment period.
In your will, you can change a beneficiary by adding a codicil, a legal document that modifies your will. Laws vary depending on your state, but you’ll typically need two witnesses to certify a codicil. If you’re making major changes, consider creating a new will and destroying the old one.
» MORE: Learn the five types of bequests