Search Articles

Find Attorneys

What Is a Contingent Beneficiary?

  • May 20th, 2024

Senior man with his two adult sons talking and laughing outside.Creating an estate plan involves selecting people to receive your money, property, or other items if you pass away.

When making a will, you’ll work with an estate planner to designate those who will inherit from you. The persons (or entities, such as a charity) you choose are the beneficiaries of your will. In most cases, you’ll choose multiple beneficiaries, such as when you set up a more complex estate planning tool, like a trust.

Local Elder Law Attorneys in Your City

Elder Law Attorney

Firm Name
City, State

Elder Law Attorney

Firm Name
City, State

Elder Law Attorney

Firm Name
City, State

In addition to executing a will, you may select beneficiaries for other types of assets you own. You may have an insurance policy or retirement account, investment account, or another pay-on-death (POD) account. You’ll typically want to select loved ones to receive the funds from these kinds of accounts upon your death. For instance, purchasing a life insurance policy involves choosing someone who will receive death benefits if you die.

These decisions inform your overall estate plan. Whether in the context of a will, trust, POD account, or life insurance policy, the people you pick to receive your assets are known as beneficiaries. They receive the “benefit” of your assets.

Primary vs. Contingent Beneficiary

A contingent beneficiary is a type of beneficiary. If the first, or primary, beneficiary passes away, cannot be found, or does not want the asset, the contingent beneficiary may be next in line to receive it. Your contingent beneficiary is typically your second choice. Think of a contingent beneficiary as a backup beneficiary.

Imagine an individual who is married and has a child. This person might make their spouse their primary beneficiary and select their child as their contingent beneficiary. This ensures that the child would get the assets if both parents died.

Selecting contingent beneficiaries creates a more robust estate plan. You likely have wishes about who would get your money and assets should you pass on. Having second-choice beneficiaries protects your autonomy, ensuring the distribution of your assets reflects your wishes.

Multiple Beneficiaries

In some cases, you may indicate two or more primary beneficiaries. For instance, you may divide your estate between several beneficiaries in your will.

A single parent could make both their minor children primary beneficiaries in their will, dividing the estate by 50 percent.

Having multiple primary beneficiaries differs from having a primary and a contingent beneficiary. The primary beneficiary has the first opportunity to receive the assets. Only if the primary beneficiary does not take the assets can the contingent beneficiary assume ownership. With multiple primary beneficiaries, the asset is divided between the individuals.

Just as it is possible to have more than one primary beneficiary, it is possible to have multiple contingent beneficiaries. A person with a spouse and two children might make their spouse their primary beneficiary and both the children their contingent beneficiaries.

Beneficiaries and Heirs-at-law

A beneficiary is distinct from an heir-at-law. While a beneficiary is someone you choose, an heir-at-law is someone who may have the right to inherit from your estate if you do not have a will or an estate plan.

Many people today do not have an estate plan. According to one 2024 Wills and Estate Planning Survey, about two-thirds of Americans do not have a will.

If you pass away without having executed a will, you would die “intestate.” States have different rules governing intestacy. These laws determine which family members may be entitled to your estate if you did not select beneficiaries during your lifetime. Often, this is your spouse and children or parents and siblings.

Stipulating primary and contingency beneficiaries gives you autonomy. You decide who receives your assets rather than letting your state statute dictate the outcome. By selecting loved ones as beneficiaries, you also can help protect their financial futures if you are no longer there to provide financial support.

Speak to Your Estate Planning Attorney

Your estate planning attorney can assist you in designating your first-choice and secondary beneficiaries. They also can partner with you on creating a comprehensive estate plan. This may include executing advance directives, identifying strategies to help your heirs avoid the probate process, and more.

Keep in mind, of course, that your life circumstances are likely to change over time. You may welcome new grandchildren, or you may have a dispute with a beneficiary and wish to remove them from your estate plan. This is why it’s essential to revisit your estate plan – and update your beneficiaries – on a periodic basis.


Created date: 05/20/2024
Medicaid 101
What Medicaid Covers

In addition to nursing home care, Medicaid may cover home care and some care in an assisted living facility. Coverage in your state may depend on waivers of federal rules.

READ MORE
How to Qualify for Medicaid

To be eligible for Medicaid long-term care, recipients must have limited incomes and no more than $2,000 (in most states). Special rules apply for the home and other assets.

READ MORE
Medicaid’s Protections for Spouses

Spouses of Medicaid nursing home residents have special protections to keep them from becoming impoverished.

READ MORE
What Medicaid Covers

In addition to nursing home care, Medicaid may cover home care and some care in an assisted living facility. Coverage in your state may depend on waivers of federal rules.

READ MORE
How to Qualify for Medicaid

To be eligible for Medicaid long-term care, recipients must have limited incomes and no more than $2,000 (in most states). Special rules apply for the home and other assets.

READ MORE
Medicaid’s Protections for Spouses

Spouses of Medicaid nursing home residents have special protections to keep them from becoming impoverished.

READ MORE
Medicaid Planning Strategies

Careful planning for potentially devastating long-term care costs can help protect your estate, whether for your spouse or for your children.

READ MORE
Estate Recovery: Can Medicaid Take My House After I’m Gone?

If steps aren't taken to protect the Medicaid recipient's house from the state’s attempts to recover benefits paid, the house may need to be sold.

READ MORE
Help Qualifying and Paying for Medicaid, Or Avoiding Nursing Home Care

There are ways to handle excess income or assets and still qualify for Medicaid long-term care, and programs that deliver care at home rather than in a nursing home.

READ MORE
Are Adult Children Responsible for Their Parents’ Care?

Most states have laws on the books making adult children responsible if their parents can't afford to take care of themselves.

READ MORE
Applying for Medicaid

Applying for Medicaid is a highly technical and complex process, and bad advice can actually make it more difficult to qualify for benefits.

READ MORE
Alternatives to Medicaid

Medicare's coverage of nursing home care is quite limited. For those who can afford it and who can qualify for coverage, long-term care insurance is the best alternative to Medicaid.

READ MORE
ElderLaw 101
Estate Planning

Distinguish the key concepts in estate planning, including the will, the trust, probate, the power of attorney, and how to avoid estate taxes.

READ MORE
Grandchildren

Learn about grandparents’ visitation rights and how to avoid tax and public benefit issues when making gifts to grandchildren.

READ MORE
Guardianship/Conservatorship

Understand when and how a court appoints a guardian or conservator for an adult who becomes incapacitated, and how to avoid guardianship.

READ MORE
Health Care Decisions

We need to plan for the possibility that we will become unable to make our own medical decisions. This may take the form of a health care proxy, a medical directive, a living will, or a combination of these.

READ MORE
Estate Planning

Distinguish the key concepts in estate planning, including the will, the trust, probate, the power of attorney, and how to avoid estate taxes.

READ MORE
Grandchildren

Learn about grandparents’ visitation rights and how to avoid tax and public benefit issues when making gifts to grandchildren.

READ MORE
Guardianship/Conservatorship

Understand when and how a court appoints a guardian or conservator for an adult who becomes incapacitated, and how to avoid guardianship.

READ MORE
Health Care Decisions

We need to plan for the possibility that we will become unable to make our own medical decisions. This may take the form of a health care proxy, a medical directive, a living will, or a combination of these.

READ MORE
Long-Term Care Insurance

Understand the ins and outs of insurance to cover the high cost of nursing home care, including when to buy it, how much to buy, and which spouse should get the coverage.

READ MORE
Medicare

Learn who qualifies for Medicare, what the program covers, all about Medicare Advantage, and how to supplement Medicare’s coverage.

READ MORE
Retirement Planning

We explain the five phases of retirement planning, the difference between a 401(k) and an IRA, types of investments, asset diversification, the required minimum distribution rules, and more.

READ MORE
Senior Living

Find out how to choose a nursing home or assisted living facility, when to fight a discharge, the rights of nursing home residents, all about reverse mortgages, and more.

READ MORE
Social Security

Get a solid grounding in Social Security, including who is eligible, how to apply, spousal benefits, the taxation of benefits, how work affects payments, and SSDI and SSI.

READ MORE
Special Needs Planning

Learn how a special needs trust can preserve assets for a person with disabilities without jeopardizing Medicaid and SSI, and how to plan for when caregivers are gone.

READ MORE
Veterans Benefits

Explore benefits for older veterans, including the VA’s disability pension benefit, aid and attendance, and long-term care coverage for veterans and surviving spouses.

READ MORE