A lot of jargon is used in estate planning, so it can be challenging to understand the terms. Knowing who will inherit your possessions and assets after your death is essential. You should be aware of the distinction between an heir and a beneficiary.
An heir and a beneficiary may appear to be similar concepts that can be used interchangeably. But in reality, each function has unique rights throughout the estate planning process, so it’s important to understand the differences. By doing this, you can ensure that your estate plan is established the way you intended.
The creation of a legally binding will is the primary factor distinguishing an heir from a beneficiary in terms of “who will receive the assets or properties.”
The fundamental difference is that an heir is a descendant or close relative who will automatically inherit your assets if your estate plans isn’t properly established. However, a beneficiary is someone you designate in a formal legal document to receive your assets or property after your death.
A blood relative of the departed is an heir. A beneficiary is a person who is expressly mentioned in a will. Therefore, not all beneficiaries of an estate are heirs, but all heirs can be beneficiaries.
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