In conversation, the words “heir” and “beneficiary” are commonly used synonymously. Legally, they are not! Read on to understand the difference.
If There’s A Will, There’s A…
Plan for beneficiaries! In other words, in a legal document, such as a will or a trust, we can name anyone (even a pet) to receive—“or benefit” from our assets when we die. When we create a plan, we choose the beneficiaries. On the other hand, if we die without a will or trust, state probate laws govern the distribution of our assets to heirs.
As Watson Law explains:
According to probate law, a beneficiary is a person who receives property from an estate by being named as the recipient in a Will or a Trust. Beneficiaries can be anyone, as long as they are identified in a legal Trust or a Last Will and Testament….
In probate law, an heir is a person who is identified as a legal recipient of estate property when no Will or Trust is available to assign that property. The courts determine heirs in the absence of any legal documents stating the wishes of the deceased, usually based on familial relationship, marriage, or another legally recognized relationship.
When there is no will, probate courts use “intestate succession” laws to distribute assets to heirs. You can learn more about this here: intestate succession.
Good To Know: Administrators and Administrator Bonds Explained
When there is no will, a probate court will generally appoint an administrator to administer the estate of someone who has died. Frequently, the court will require procurement of an administrator bond, before the affairs of the estate can begin to be settled.
An administrator bond is a type of fiduciary bond required by courts to protect the interests of the estate and its heirs in accordance with state law. When a judge requires an administrator bond, it must be secured and filed promptly.
Easily obtain an administrator bond from a leading, national provider: Colonial Surety Company. Uniquely, Colonial offers direct, digital, administrator bonds. Sometimes these bonds are referred to as executor, estate, fiduciary, personal representative or probate bonds. Colonial provides all of them. Just get a quote online, fill out your information, and enter your payment method. Print or e-file the bond right from your home or office—even while at court. It’s that simple.
Learn More and Get Your Administrator Bond Here.
To Heir Is…?
Well, it can be a little confusing! That’s because, in making a will or trust, the beneficiaries you name could potentially be the same relations that probate law would point to as heirs. However, your named beneficiaries could be anyone—non-relations, distant relations—or even an entity, such as a charity. As noted by Haimo Law:
Your legally expressed wishes always take precedence regarding who will receive your remaining assets after probate.
So, when you create official estate planning documents such as a will or trust, those beneficiaries you have named have a right to the assets you wish them to have.
When you do not execute a will, your assets are simply devised…according to the statutory predetermined order.
Explaining Takes Time…Bonding Does Not Have To!
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