A beneficiary can be any person who stands to benefit from a particular transaction. A beneficiary can come from either a financial world or real estate. Either way, if they are eligible to receive reimbursements from a will, trust or life insurance policy, they are known as beneficiaries. You can either name a beneficiary in a legal document, or the government will choose someone who suffices all criteria. The owner of the property can however change the beneficiary name any time. While it requires some intense legal and paperwork, it can come handy.
A beneficiary can be defined in a number of ways, depending on the industry you are in. However, when it comes to the real estate industry, there are mainly two definitions that are followed in the industry. Here mentioned are the same definitions:
i. A beneficiary is essentially a person who will receive an inheritance if the actual owner of the property passes away. Along with the insurance policy which is provided annually in a lump sum amount, real estate will also be passed on to the beneficiary.
ii. Simply put, a beneficiary is someone who is next in line to receive all the benefits when the original owner passes away. However, the distributions often come with several stipulations and tax consequences.
While not very evident, having a beneficiary can help in a lot of ways. Some of the more notable benefits are further mentioned here.
Reliability:
If you are someone who is skeptical about their life span, having a beneficiary can really help. It means that you can rest assured that you property will not go to waste and used by someone you trust. In addition to that, if you know the beneficiary you can also guide them to how you want the property to be used after you are gone and ways they can maintain it.
Legal ease:
More often than not, you might find your property to be disputed if there is no legal heir to it. In such cases, either the government takes your property, or two owners fight several legal battles to find the rightful owner. To avoid this you can just name your beneficiary and after you pass away, all such legal disputes can be avoided. This also ensures that you give away the property to the individual you want to and use it as per your wish.
