TL;DR: A beneficiary is a person or organization entitled to receive money, property, or another benefit under a will, trust, insurance policy, or similar legal arrangement.

Definition

A beneficiary is a person or organization entitled to receive money, property or some other benefit under a Will, a trust, an insurance policy or other legal arrangements.

Why it matters

Beneficiaries receive the assets distributed from an estate or trust.

Examples

Horace leaves money in his will to two beneficiaries – his friend Gerry and the SPCA.

Allan creates a trust, the beneficiaries of which are his four children.

Mary has been named as the designated beneficiary on her husband’s pension and life insurance plans.

Frequently asked questions

Can a beneficiary also be an executor?

Yes. These are two different roles, but a person can be both the executor of a Will and the person entitled to receive gifts through the Will.

Can beneficiaries challenge a Will?

Sometimes. BC’s Wills, Estates and Succession Act allows a spouse or child the right to make a claim against an estate if they feel they have not been left a reasonable amount.

Other beneficiaries might also be able to challenge a Will if they can prove that the will-maker was incapable, was acting under undue influence, or if there were suspicious circumstances surrounding the creation of the Will. There are other possible avenues for challenging a Will as well, depending on the circumstances.

Do beneficiaries have any obligations to the estate?

Beneficiaries should sign a receipt for the gift they receive; they should also be given a set of accounts for their review and approval. The executor should not distribute the estate until they have received approved accounts (among other things) from all of the beneficiaries.

Here are some terms that are related to the word beneficiary: