A question I receive frequently when meeting with clients for estate planning is “what is the difference between an heir and a beneficiary?” An Heir is a family member who is entitled to receive property under the laws of intestacy. When a decedent (deceased person) dies without executing a Will or transferring property to a trust, the estate is “intestate”. Intestate estates are settled according to state probate law. An heir is also referred to as an heir at law. A beneficiary is a person who is designated to receive something under the Decedent’s Last Will and Testament, Trust, or otherwise. When a Decedent dies and executed a valid Will, the estate is a “testate” estate.
Both the heirs and beneficiaries are included during a probate in Georgia at different times. Heirs participate in the Petition to Probate an estate. If a Will exists, the beneficiaries participate in the Petition to close the estate.
A Decedent makes beneficiary designations in his or her Last Will and Testament or trust. In addition, Decedents may designate beneficiaries on bank accounts, IRA’s and 401k’s, life insurance, stock accounts, and other accounts. Accounts pass to the beneficiary outside of probate when beneficiary designations exist on the account. Making beneficiary designations on accounts is one aspect of estate planning that can achieve probate avoidance. In addition, beneficiary designation on accounts provides privacy and avoids creditors of the estate.
We work with individuals and families developing estate plans and probating estates. Each individual’s needs are unique and this article only addresses one aspect of estate planning and probate. For more detailed information and to discuss your specific case, call us today at (678)781-9230 or email us at firstname.lastname@example.org to schedule an appointment.
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