If you are starting to think ahead and want to ensure certain assets and heirlooms go to your family once you’re gone, you may have seen the terms “heir” and “beneficiary.” Although people use the two terms interchangeably, they are not the same.
So what is the difference between an heir and a beneficiary?
Working with an experienced Georgia estate planning attorney can help you understand the differences between an heir vs a beneficiary, and why it’s essential to name who you want to receive your assets in an estate plan.
For assistance, please don’t hesitate to call (706) 354-4000 or reach us online today.
Who Is an Heir?
An heir is a person (or persons) who has the right to inherit assets or personal property from another person after that person’s death. An heir is a family member related to you by blood or marriage (e.g., spouse, children, grandchildren). An heir may also include a surviving spouse who has inherited the rights of their deceased spouse under laws of intestacy or community property.
When a person dies without having a valid will or trust outlining who is to receive the assets and property, the person dies “intestate.” Dying intestate means that Georgia law governs who will receive your assets based on who your heirs are. The rights of heirs to an estate are to inherit property and assets in the estate based on their position in the family.
The laws provide a priority order for distributing an individual’s property to their nearest living relatives. Intestate laws in Georgia can be complex depending on your family structure. In some cases, locating relatives qualified to inherit under intestate laws can be difficult.
Though there may be exceptions, generally, the order of distribution if you are married when you pass away is:
- You have no children or living descendants — your spouse inherits your estate
- You have living children, or deceased children survived by descendants — your spouse, children, and descendants of the deceased children share the estate (spouse won’t receive less than one-third of the estate)
If you are unmarried when you pass away, the order of distribution is:
- Your children and descendants of deceased children share the estate
- If you don’t have surviving descendants, your parents share the estate equally
- If you have no descendants or surviving parents, your siblings and descendants of deceased siblings share the estate
After the immediate family, intestate laws disperse property to nieces and nephews, grandparents, aunts and uncles, and cousins. If relatives are not located, the estate could go to the State of Georgia.
With the state making the determination, the recipients may not be who you want them to be, or they might not receive the amounts you want them to have. It is important to work with an estate planning attorney to most effectively distribute your assets.
Who Is a Beneficiary?
A beneficiary is a person or organization legally named by you in a will or trust to receive specific assets or property from your estate. Beneficiaries don’t have to be relatives; they can be anyone (even an organization) you choose to name in a legal document or arrangement.
A beneficiary may or may not be an heir. Named beneficiaries have greater legal claims to your assets than unnamed heirs. A beneficiary is entitled to certain information regarding the original estate assets and its property inventory.
There are two main types of beneficiaries:
- Primary beneficiary — the first individual the deceased has selected to receive the specific asset or property
- Contingent beneficiaries — secondary beneficiaries will receive the assets if the primary beneficiary is unable to
An estate beneficiary has rights that the executor, administrator, or trustee should respect. Some of the rights include:
- The right to receive the benefits under the estate promptly
- The right to review, approve, or disapprove the level of compensation set out for an executor or administrator
- The right to request an accounting of the estate from the administrator or executor
- The right to information about the original estate assets and inventory or property
If a beneficiary does not believe the administrator or executor is doing a sufficient job managing the estate, the beneficiary can request that the court remove or replace them. The court will only do so if there is adequate justification.
Naming beneficiaries ensures that the people you want to receive certain assets will get them as you direct and choose.
Who inherits if there is no beneficiary? As noted above, without any named beneficiaries, the property or assets will likely be distributed under the laws of intestate succession.
Heir vs. Beneficiary
The main difference between an heir and a beneficiary is that an heir is a descendant or close relative of the decedent, and a beneficiary is an individual or organization designated to receive certain assets in a will, trust, or other legal arrangement.
Work with Our Estate Planning Attorneys to Set Your Family Up for Success
If you die without a will or any named beneficiaries, your family may have to deal with stressful court processes and lots of uncertainty about who will receive what. Start planning now with Blasingame, Burch, Garrard & Ashley, P.C. Our experienced estate planning attorneys will review your estate and assets and help you draft a well-thought-out estate plan.
We will protect your rights and ensure each beneficiary receives what you want. Planning is a gift to your family. You can be at peace knowing your wishes for your family will be upheld. Our law firm has been in business for 40 years.
We are AV Rated by Martindale-Hubbell, the highest Peer Review Rating possible. We focus on each client’s specific wishes to create individualized estate plans. Call Blasingame, Burch, Garrard & Ashley at (706) 354-4000 or fill out our online form today to learn how we can help you with your estate planning needs.
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