In this section:
What is a "Beneficiary"?
Who Qualifies as a Beneficiary?
Different Types of Beneficiaries
   -Specific Gift Beneficiary
   -Beneficiary to Residue
   -Alternate Beneficiary to Residue
Restrictions on Beneficiaries
   -Minor
   -Spouses
Charities
Survivorship Period

What is a "Beneficiary"?

The word "Beneficiary" means the person or organization you leave property to under your Will.

Who Qualifies as a Beneficiary?

With the few exceptions set out below, any person or organization you choose may receive property under your Will.

The following types of persons or organizations who would not qualify:

(i) a lawyer who drafts a Will is excluded;

(ii) the individual who witnessed the signing of your Will is disqualified as a Beneficiary in some jurisdictions. It is recommended that none of the Witnesses to your Will be Beneficiaries;

(iii) any person who unlawfully caused the death of a Testator cannot inherit under that Will; and

(iv) an unincorporated association that is not able to hold property does not qualify as a Beneficiary.

Different Types of Beneficiaries

Three types of Beneficiaries are discussed in this Estate Planning Guide section: a Specific Gift Beneficiary, a Beneficiary to Residue and an Alternate Beneficiary to Residue.

Specific Gift Beneficiary

Under the BuildaWill™ program, Specific Gift Beneficiary is a person or organization usually named to receive a specific item of property.

Often times individuals consider leaving specific items such as particular sums of money, jewelry, collections, or cars to certain individuals.

Please note that under the current BuildaWill™ Program, it is important to know that all specific gifts are distributed first and then the Residue is dealt with as the remainder. If a Specific Gift Beneficiary predeceases you, then his or her specific gift, will fall into the Residue of the Estate and be shared by those named as Beneficiaries to Residue.

Beneficiary to Residue

The Residuary Beneficiary is that person(s) or organization(s) named to receive the Residue of the Estate, which is your estate remaining after the payment of debts, expenses, and specific gifts.

Alternate Beneficiary to Residue

You may name one or more Alternate Beneficiaries to Residue to receive the Residue of the Estate in the event that the primary Beneficiaries to Residue predecease you.

Restrictions on Beneficiaries

A. Minors

Subject to the jurisdiction, minor children can only receive a nominal amount of property in their own names between $1,000.00 and $5,000.00.

Beyond this amount, there must be an adult appointed called "Custodian," "Trustee," or "Property Guardian" to receive and manage the property on behalf of the child.

Three basic methods for leaving property to minor children are as follows:

(i) a custodianship under the Uniform Transfers to Minors Act,
or Uniform Gifts to Minors Act;

(ii) a child's trust;

(iii) a family pot trust.

Uniform Transfers to Minors Act

The Uniform Transfers to Minors Act is legislation that has been adopted by every state, save and except for Vermont and South Carolina. Under this legislation your child's trustee is called a "Custodian" and manages the property on behalf of the child until the child reaches the age of majority between 18 and 25 depending the laws of the state.

A child's trust

A child's trust enables you to leave certain property in trust for one child. This property is held separately from the property left to other children.

A family pot trust

In a family pot trust all of the property that you have left to 2 or more of your children is held in common and any trust property can be distributed to any of the children. The BuildaWill™ forms do not include a form for a family pot trust.

B. Spouses

Most jurisdictions provide a surviving spouse certain legal rights to claim a portion (between 1/3 and 1/2) of the deceased spouse's Estate. If it is your intention to disinherit your spouse, you should consult an attorney. The BuildaWill™ forms are not suitable for your needs.

Charities

Some state laws restrict your ability to leave large percentages of your property to charities. Please consult a lawyer in the event you wish to leave more than 50% of your Estate to a charitable institution or a not-for-profit organization.

Survivorship Period

Normally in a Will there is a "survivorship period" that requires that a Beneficiary survive you by a specified period of time in order that he/she may receive the inheritance. This provision ensures that the property left under your Estate is received by an alternate Beneficiary named in your Will instead of the initial Beneficiary's Heirs. This provision also avoids unnecessary administration costs in the estate of a deceased Beneficiary.

A survivorship period is normally 30 to 60 days following the date of a Testator's death.

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