What Are Primary Beneficiaries?

Selecting your beneficiaries is an important part of the estate-planning process. Primary beneficiaries are one type of beneficiary that you will have to be aware of throughout this process. Here are the basics of primary beneficiaries.

Primary Beneficiaries

When you are dealing with estate planning, you are going to have to designate primary beneficiaries for several different things. Primary beneficiaries are the individuals that are going to receive your assets when you pass away.

Uses

There are several different things that you could potentially need to name a primary beneficiary for. For example, if you have a retirement account such as a 401(k) or an IRA, you are going to need to name a primary beneficiary for that. You will also need to name a primary beneficiary for any life insurance policies that you have. When you are coming up with your will or a trust, you are going to need to name primary beneficiaries for your assets as well.

Difference from Secondary Beneficiaries

With many of these things, you will also need to name a secondary beneficiary. A secondary beneficiary is an individual that is going to step into the beneficiary role if one of your primary beneficiaries dies before you do.

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