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Administrators should know how heirs and beneficiaries differ

Many people tend to use the terms "heir" and "beneficiary" interchangeably, but these are actually very different terms. It is important that people who are handling the estate administration duties understand what the differences are, so they can use the proper terminology as they handle the estate.

For the purpose of estate planning, an heir is a person who is listed in the intestate succession laws. These are individuals include the spouse, children and other family members.

When a person doesn't have an estate plan, they are said to die intestate. This means that state laws dictate who is going to get what in a specific order. When a person passes away without an estate plan, assets go to the person at the top of the list. If nobody meets that relationship, the estate moves down to the next person. This continues until someone meets the legal requirements.

When someone is a beneficiary, it means that they

are actually named in the estate plan. This can be in either the will or trusts. They have something that they are supposed to get from the estate. It is also possible to be considered a beneficiary if someone is listed on a life insurance policy or any other financial account.

A person can be a beneficiary without being an heir. This is why an estate plan is so important, and it is up to the administrator to ensure that it is followed as it is intended. The duties of the administrator are important, so anyone who is doing this job should ensure they know exactly what they're expected to do.

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Law Offices of Nancy M. Rice
Representing clients in Ocean City and communities throughout New Jersey.

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Rice & Quattrone, PC
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CHERRY HILL, NJ 08034

Phone: 856-673-0048
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Rice & Quattrone, PC
Linwood Professional Plaza
2021 New Road, Unit #9
Linwood, NJ 08221

Phone: 609-398-3447
Fax: 856-673-0052
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