Changing Your Beneficiaries

Primary beneficiaries vs. contingent beneficiaries

Certain kinds of assets, such as life insurance, are directly transferable to another person without having to go through any complex processes after you die. Typically, though, your loved ones will not have the right to access your assets while you are still alive.


Beneficiaries are people who may inherit your assets as indicated in your will, life insurance policy, trust or retirement account. You can also name a charity as a beneficiary. As a rule, your beneficiary must have the legal ability to accept the assets you have passed down. This is why you cannot leave money directly to your pet – they do not have the legal ability to accept it. If you state a child or legally incompetent adult as a beneficiary, the court might appoint a guardian to help manage this money until they can manage it themselves.

Primary beneficiary

Your primary beneficiary is the person who is first in line to inherit your assets once you have died. You can also name more than one of these, meaning they will split the asset accordingly. You are also able to divide your inheritance unevenly between your primary beneficiaries if you so wish.

Contingent beneficiary

Contingent beneficiaries are those who are second in line behind your primary beneficiaries. Some only inherit if your primary beneficiaries cannot be found, if they refuse the assets or if they die before you do. So contingent beneficiaries inherit nothing as long as your primaries accept these funds. You can also create contingencies that keep your beneficiary from inheriting your money unless they meet certain qualifications. For example, you could name your child as a beneficiary but state a restriction that they can only inherit once they have completed university, or once they get married. You could also leave your home to your child but require them to live on the property for a designated length of time before they receive full rights to the home.

Can you change beneficiaries?

Considering your beneficiaries do not have any rights to your assets while you are still alive, you are free to change your beneficiary choices at any given time. If you get married or divorced, you might decide to review these choices on your estate, life insurance policy and any other assets. This is simply a matter of completing a form which can obtain from the company that manages each assets. Your state’s laws may invalidate certain beneficiary designations in your will upon divorce, marriage or the birth of a child but it is always a good idea to double check these laws. It is also generally a good idea to invalidate your old will yourself and draw up a new one, rather than letting the law direct where your assets will go.

Bank of Mom & Dad

Bank of Mom & Dad See the table below for % of 21-39 year olds who have relied on parents financially since the start of