Primary Beneficiary vs. Contingent Beneficiary
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Primary Beneficiary vs. Contingent Beneficiary

One of the better ways to guarantee your assets are overseen in accordance with your wishes is to name both a primary and a contingent beneficiary. Understand the difference between them so you can make an educated decision.

When establishing a life insurance policy, living trust, or, retirement accounts you should designate a primary beneficiary, or the first individual or organization in line to get those assets following your passing. In the event that individual passes away before you or is unable to be located to receive the assets, you should also designate a contingent beneficiary, or next individual or organization in line. By doing this, you can prevent the potential that your assets will go into probate, which can become more expensive for your estate and postpone distribution of the inheritance to your heirs.

Understanding types of beneficiaries

Your primary beneficiary is the individual or organization that has the initial demand to inherit your assets following your passing away. Regardless of the word “primary,” you can designate more than one such beneficiary and establish the way the assets are going to be distributed among them.

A contingent beneficiary, however, is second in line in inheriting your assets. The solely way a contingent beneficiary is going to inherit anything from the accounts or policies is when the primary beneficiary or beneficiaries have passed away before you or otherwise can’t be located.

For instance, when you have two children and designate your daughter as your primary beneficiary and your son as your contingent, only your daughter would inherit your assets following your passing away unless she passes away before you or is unable to be located, in which case your son would inherit the total sum. When you designate them both as primary beneficiaries, they would divide the assets in accordance with the percentages you have chosen.

Alternatively, you may decide to designate your spouse as your primary beneficiary and your children as your contingents, in which instance your children would inherit only should your spouse pass away before you. If you wished both your spouse and children to collect your assets, you would designate all of them as primary beneficiaries, with your spouse getting half and your two children getting one-quarter each. In this case, if your spouse passes away before you do, your children will remain your primary beneficiaries.

Selecting beneficiaries

You can select just about anybody to inherit your assets through a living trust, life insurance policies, or retirement accounts as either a primary or contingent beneficiary—with one stipulation: the individual is required to have reached legal age through state law in order to directly get the inheritance. When the selected beneficiary is under age eighteen or twenty-one, subject to your state’s law, the assets would initially go to a legal guardian. Designating a minor as your beneficiary might send the matter to probate court—a case that a life insurance policy and retirement account are intended to avoid.

No matter how much you love your pet, they are unable to be named a beneficiary. When you are concerned about the well-being of your pet after you have passed away, you can take care of them through your last will or your living trust by leaving a certain amount of funding to a trust that is going to be created for your pet following your passing. Through your last will or trust, you can designate someone to serve as the trustee of your “pet trust” and that individual is going to take care of your pet utilizing the funds the benefit of your pet for the rest of their life.

Nevertheless, your beneficiary does not necessarily need to be a person. You could also appoint your preferred charity or non-profit institution as your primary or contingent beneficiary, though there are added tax consequences you need to think about with this alternative.

One other possibility to address with your beneficiary appointments is the unimaginable: that a tragedy could impact all your selected beneficiaries leaving your estate to the state. You can safeguard against this by appointing a remote contingent beneficiary, which is an organization or individual that would inherit your assets when none of your other selected beneficiaries out live you.

Changing beneficiaries

Beneficiaries do not have any legal rights to your assets throughout your lifetime—and might not even know they are your beneficiaries—so you can alter and change the appointments on your life insurance policies and retirement accounts whenever you want, with one notable concession: when your account is irrevocable, you are unable change beneficiaries.

Retirement accounts like 401(k)s and IRAs make it easy to switch designated beneficiaries, but this could have serious tax repercussions, particularly in which significant others are involved, it’s important to speak with an estate planning attorney or tax advisor to guarantee your affairs are arranged in the most beneficial way possible.

Don’t forget that your estate plan is, somewhat ironically, living and breathing documentation. Meaning you should review it routinely to make sure all the terms still communicate what you want to happen to your assets following your passing. When you or loved ones endure a life event or change, like a birth, marriages, divorces, or death, you need to go back to not only your will and any trusts but also any life insurance policies and retirement accounts to be sure you have designated your selected beneficiaries—each a primary and a contingent. Also, if have changed your mind concerning who you want to inherit your assets, it’s time for updating your beneficiaries.

It’s not possible to plan for all possible probabilities, but with the advice of a knowledgeable estate planner, you can be sure you have arranged your affairs that best reflect your desires and rest easy with the knowledge that your estate is going to be overseen effortlessly once you have passed away.


  1. Contingent beneficiary vs. primary beneficiary. LegalZoom. (n.d.). Retrieved January 23, 2023, from

Attorney Arizona

There’s nothing better than the peace of mind you will have knowing you’ve protected your family at a time when they need it most. Let us help. Schedule a consultation or contact Ogborne Law, PLC of Arizona today.

Here at Ogborne Law, we are proud to include estate planning among our services. Your estate planning attorney will work closely with you to draw up all the documents you’ll need to communicate your wishes to the court. We’ll take the time to answer all of your questions and guide you through this important process. If you’re ready to start your consultation with Ogborne Law, visit our Estate Planning Consultation request page.

There are so many aspects to consider in estate planning, and we haven’t even touched on those individuals who own a business! You’ve worked hard for your life, and you need to protect it. You owe it to your family and your legacy to take care of planning now. Contact Ogborne Law to schedule your estate-planning session.

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