Naming beneficiaries
A beneficiary is any person or organization that receives part of your estate under your will. Trustwise lets you name multiple beneficiaries and specify how your estate is divided among them.
Primary beneficiaries
Primary beneficiaries are the first people in line to receive your estate. You specify each person's share as a percentage. All primary beneficiary percentages must add up to exactly 100%.
For example:
- Spouse: 60%
- Child 1: 20%
- Child 2: 20%
Alternate beneficiaries
An alternate (or contingent) beneficiary inherits a primary beneficiary's share if that primary beneficiary dies before you do. Trustwise lets you name an alternate for each primary beneficiary. This is optional but strongly recommended — without an alternate, a deceased beneficiary's share passes according to your state's intestacy rules, which may not match your wishes.
Naming minor children as beneficiaries
You can name a minor child as a beneficiary. However, minors cannot legally hold property outright in most states. The court will typically appoint a custodian or conservator to manage the assets until the child reaches adulthood. If you want more control over how a child's inheritance is managed, consider speaking with an estate attorney about a testamentary trust — this is outside the scope of a Trustwise document.
Naming organizations
You can name a charitable organization as a beneficiary. Use the full legal name of the organization as it appears on their IRS determination letter. Include a brief description (for example, "the American Red Cross, a national humanitarian organization") to reduce ambiguity.
What happens to my estate if a beneficiary dies?
If a primary beneficiary dies before you and you have not named an alternate for their share, the share passes as part of the residue of your estate. If your entire estate has no living beneficiaries, it passes to your heirs under your state's intestacy laws. This is a reason to keep your will up to date and name alternates.
Assets that pass outside your will
Certain assets do not pass through your will at all, regardless of what your will says:
- Jointly owned property (e.g., joint tenancy with right of survivorship) — passes to the surviving owner
- Beneficiary-designated accounts (e.g., 401(k), IRA, life insurance, bank accounts with payable-on-death designations) — passes directly to the named beneficiary on the account
- Revocable living trust assets — passes under the terms of the trust
Your Trustwise document covers the rest of your estate. It is worth reviewing your beneficiary designations on financial accounts at the same time you complete your will.