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Heir vs Beneficiary: What’s the Difference?

Heir vs Beneficiary

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In honor of National Estate Planning Month, we’re looking at the difference between an heir and a beneficiary. Contrary to popular belief, the two aren’t the same thing and there are some important differences to consider. Understanding what they are and what they mean could change the way you handle your last will and testament.

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Who is an Heir?

An heir is a person legally identified as someone who’s entitled to receive estate property when there is no will or trust available.

If someone dies without estate planning, that’s called dying intestate. In this situation, state law determines how the estate is passed to others and which heirs have the legal right to receive assets. The estate enters the probate process and could take years to settle.

If a person dies intestate, the probate court appoints a personal representative. The person serves as the Executor to oversee asset distribution.

What Rights Do Heirs Have to a Deceased Person’s Estate?

If there’s a valid Last Will and Testament, the heir’s right to an inheritance is clearly spelled out. If there’s no formal estate plan, legally, the next of kin are heirs. State law dictates the intestate succession order. In most situations, it follows this order:

  • Spouse
  • Children
  • Descendants
  • Close relatives
  • Other family members

Can a Parent Be an Heir?

In cases where adult children with assets pass away before marrying and having a family of their own, parents are considered heirs.

 

Don't Wait for Probate

Types of Heirs

The term “heir” may describe someone who’s entitled to some portion of a decedent’s property, there are legal considerations for different types of heirs.

Heir Apparent

This is the person logically to have rights to receive assets. The claim cannot be discounted because another heir is born. The heir apparent is the first person in line for the succession order.

Presumptive Heir

The presumptive heir is someone who is entitled to an inheritance, but their right may be displaced.

Adoptive Heir

Most of the time, an adoptive heir has the same legal right as biological children. Some states have intestate laws that may block adopted children from an equal share of the estate. That’s why it’s crucial to speak to an attorney regarding your state laws.

Collateral Heir

This is a blood relative of the deceased, but not a direct descendant. For example, it may be siblings, cousins, aunts, uncles, or another family member.

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Who is a Beneficiary?

A beneficiary is a person who’s legally named to receive property from an estate. Naming beneficiaries in your Will helps to ensure all your assets go to the people you want them to go to. For instance, if you want to leave property to your grandchild, naming them as the beneficiary in the will supersedes succession order. Without it, the property could go to their parents instead.

If you have strained relationships with your kids and don’t want them to inherit anything, you must have a will in place. Despite the fact that they are your closest heirs, they won’t be legally entitled to claim assets, as long as the will states that they must go elsewhere.

There is an exception for spousal rights, however. If a parent has a will stipulating that all the assets should be divided among the children but remarries without amending the will to include the spouse: spousal rights give the surviving spouse the ability to claim a percentage of assets even though they aren’t listed in the will.

This has to do with community property laws that state any income (or debt), real property, or personal property acquired during the marriage is the property of both spouses, no matter who earns or spends the income. These state laws vary as well, making legal counsel all that more important.

Heir vs Beneficiary

The main difference is that an heir is a close relative in line to receive an inheritance from your estate if you die without a proper estate plan in place. A beneficiary is someone you name with legal documents, to receive your assets upon your death.

If you do not legally name beneficiaries before your death, the state intestacy law, not your last wishes, dictates what happens to your assets. If you want close friends, rather than blood relatives, to have access to your estate, you must name them as beneficiaries. They would not be heirs.

Some assets, such as a life insurance policy, require you to name a beneficiary. This may also be the next of kin but doesn’t have to be. The life insurance funds will always go to the named beneficiary.

Heirs can be beneficiaries – but not all beneficiaries are heirs.

An Heir Can Get A Loan on an estate in probate

An heir can receive a loan or a cash advance on inheritance that is tied up in the probate process. Heir loans are difficult loans to receive and come with high-interest payments. As a result, many heirs opt to receive a cash advance since it is quick and easy to obtain.

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Can You Contest a Will or Estate Plan?

Yes, any heir who has a valid interest in the estate has the right to contest a relative’s estate plan. To contest means to legally question the last will and testament. For example, the signature may be forged or the deceased was under duress when drafting and signing the will.

To contest a will is not only time-consuming but also expensive. Always seek legal advice before attempting to contest a will.

Do You Have an Inheritance Stuck in Probate?

If your inheritance is in probate, it could be months or even years before the case is settled. If you need money now, it doesn’t help. Contact us today to find out how you can access money without needing to wait for probate.

Legal Disclaimer: Please note that Inheritance Advanced is not a lender. Inheritance advance does not provide probate loans, inheritance loans, or estate loans, rather, an advance on a portion of proceeds signed over to Inheritance Advanced. Inheritance Advanced is also not a probate attorney and any information in this article should not be misconstrued as legal advice. We recommend that you seek the advice of an attorney, CPA, and tax attorney regarding any decisions pertaining to your probate.

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Our Inheritance Cash Advances help heirs receive a portion of their inheritance payout in just a few days. We then wait and are paid directly out of your share when the estate finally closes. We wait for probate so that you don’t have to. Click below and fill out our short form to receive an advance immediately.

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If you are an Heir or Executor to an Estate, You Don’t Have To Wait For Probate!

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Inheritance Advanced is an inheritance funding company, not a lender. We offer Inheritance Cash Advances which are a new and innovative option for heirs to receive the immediate cash they need during challenging times. This program allows an heir the benefit of receiving immediate money, in exchange for their future inheritance.

Inheritance advances are a way for heirs to receive immediate funds without providing credit or employment verification and they don’t require collateral. You also will not be responsible for high monthly interest payments like probate loans or inheritance loans.

Get Your Inheritance Money Now!

Our Inheritance Cash Advances help heirs receive a portion of their inheritance payout in just a few days. We then wait and are paid directly out of your share when the estate finally closes. We wait for probate so that you don’t have to. Click below and fill out our short form to receive an advance immediately.

Probate Costs