If a loved one recently passed away, you may find yourself called a beneficiary, heir, or inheritor. All three terms have a similar general meaning, although slight differences exist. Essentially, being a beneficiary, inheritor, or heir means you will receive assets from a loved one’s estate when that person passes away.
As someone receiving assets, you may not care exactly what term describes you. However, you may encounter these terms as you look through legal documents related to your loved one’s estate. It’s helpful to have an understanding of the similarities and slight differences.
Differences Among Heirs, Beneficiaries, and Inheritors
Although beneficiaries, inheritors, and heirs are similar terms, they differ in nuanced ways.
How a Beneficiary and an Heir Differ
The beneficiary is specifically named as the recipient of assets from a decedent’s estate, while the heir is a close relative who expects to receive assets.
Most people could easily name the expected heirs to a person’s estate, whether children, spouses, or grandchildren. The beneficiaries could be these same close relatives.
However, in some circumstances, beneficiaries aren’t close relatives and may include friends, cousins, or business partners. Either way, the decedent officially names beneficiaries in a legal document related to inheritance, like a living trust.
Certain types of assets, like life insurance policies or investment accounts, have beneficiaries named when someone sets up the account or policy.
How an Inheritor and an Heir Differ
An inheritor is someone named in a will as a specific recipient of the estate’s assets. The heir is an assumed recipient of the estate’s assets because of being a close relative.
Inside the will, your loved one would list specific inheritors who will receive certain types of assets from the estate.
If no will exists, the probate court must apply your state’s intestate succession laws to determine who receives the assets. The law names surviving close relatives as heirs under intestate succession.
Inheritors and heirs can be one and the same, as both are often close relatives of the decedent.
How an Inheritor and a Beneficiary Differ
Inheritors and beneficiaries are almost identical terms in legal documents like wills, trusts, or financial documents that specify who will receive assets.
The term beneficiary appears more often in documents like life insurance policies or living trusts. Beneficiaries receive the assets upon the death of the policyholder or account holder.
The term inheritor may appear more often in legal documents like wills.
People frequently consider inheritors as relatives who receive assets from the decedent’s estate. Beneficiaries can also be close relatives, but they are sometimes non-relatives, like friends or non-profit organizations.
Similarities Among Inheritors, Beneficiaries, and Heirs
The primary similarity among these terms is that they refer to people or entities who may receive assets from a decedent’s estate. All three terms can refer to close relatives. The most common term is beneficiary if the recipient of the assets is not a close relative.
How Does Someone Become an Heir?
An heir has a legal right to receive assets from a decedent’s estate unless a legal document gives someone else that right. Naming heirs commonly occurs when no will exists.
Here is a list of the most common people who qualify as heirs:
- Children
- Spouse
- Grandchildren
- Parents
- Siblings
Each state’s intestate succession laws list the people that the laws consider heirs. These laws often list the heirs in the order in which they qualify to receive assets from the estate. If the decedent has no surviving children or a surviving spouse, the assets would move to the next heir on the list.
Intestate succession laws also specify the percentage of the total value of the assets each type of heir could receive. Some intestate succession laws may give the surviving spouse 50% of the assets and 50% for all the children to split, for example.
Determining heirs could be a complex process if your loved one had a large family consisting of adopted children, step-children, step-grandchildren, and ex-spouses. When no will exists, the probate court works through any of these kinds of complexities.
Frustrated With Probate? Rockpoint Probate Funding Offers a Cash Advance
A cash advance can be helpful to people who are waiting on an inheritance to move through the probate court process. Some probate cases can require more than a year to conclude. In the meantime, your inherited assets remain tied up in court.
You might seek a cash advance from Rockpoint Probate Funding as a beneficiary, inheritor, or heir so that you don’t have to stress over delays in the probate administration process. We offer an amount based on the value of your expected inheritance, which you won’t have to pay back if the inheritance falls through. To learn more about whether a cash advance will fit your needs, call Rockpoint Probate Funding today at (888) 263-8588.
