Thursday, October 4, 2012

What Is A Beneficiary And Its Types

There are several explanations, but I would like to give a brief idea of What is a Beneficiary and it's various types. A beneficiary may be a single person or multiple people who receive a grant in the form of money or tangible assets. The source of this grant may come from an insurance policy, trust fund, retirement plan, pension or other grants from legal contracts.

To ensure the welfare and future of a beneficiary, the concept of granting and receiving of benefits was made to execute the will of a benefactor or the awarding of a claim. In the legal proceeding of a trust claim, the beneficiary also receives a periodic payment to execute the grant brought forth by a benefactor.

There are many types of beneficiary categorized according to the nature of the claim or the source of the benefits. First is the Primary Beneficiary. A concrete example of such is an heir or heiress who is the recipient of an inheritance from a deceased parent, family member or close relative. The benefits may come in the form of money, such as monthly allowances, annuity or pension, or in the form of tangible assets, such as buildings, houses, land or other real estate properties previously owned by the grantor.

Most inheritances are arranged prior to the grantor's death, which will be executed in the will. An estate planning firm and its executor makes sure that the will is completed accordingly.

In some instances, when the beneficiary has not yet reached legal age or is mentally incapacitated, he or she should wait or become otherwise before receiving the benefits from the inheritance. However, a trustee may be appointed by the law to represent and receive the benefits in lieu of the beneficiary in this case. On the other hand, if ever the primary beneficiary is no longer qualified or is deceased, the benefits will be granted to someone else, called the Contingent Beneficiary.

The concept of giving benefits may not always apply to family members or relatives. Donations from a charity event, for example, may be beneficial to many people or to an organization chosen to acquire the said event's proceeds. This is the third type of beneficiary called an Immediate Beneficiary, which is basically the recipient of a development project's revenue.

The fourth type of beneficiary is the Direct Beneficiary, which is often the third party intended to be included in the provisions of a contract between two parties. The third party is stipulated as the recipient to settlements in the event of breach or disputes. Like for example, upon breach of contract between an intermediary service company and an online merchant, the online shopper may receive monetary settlement and directly becomes the beneficiary as prescribed in the contract to protect consumers.

The last type of beneficiary also has an involvement in legal settlements. This is the Incidental Beneficiary who may not have been mentioned in the legal contract of two main parties but is negatively affected resulting to a claim. For instance, a group of workers claim payment for damages caused by a poisonous chemical used on the job. As the company wins the dispute, the workers consequently receive the benefits of the claim.

No comments:

Post a Comment