Contingent beneficiary

What it means

A contingent beneficiary is the second in line. They receive nothing unless the primary beneficiary is gone, has disclaimed, or cannot be found.

Most forms allow contingent beneficiaries and most people leave the field blank. Where it is blank and the primary beneficiary has died first, the money usually falls back into the estate — and therefore into probate.

Why it matters

A blank contingent line is a frequent way an asset that was meant to avoid probate ends up in it.

It matters most in exactly the situation nobody plans for: a beneficiary who dies before the account holder.

When you are likely to meet it

• When a beneficiary has died before the person who named them.
• When reviewing designations on a parent's accounts, or your own.

How this varies by state

What happens when a named beneficiary dies first depends on the state's anti-lapse rule and on whether that rule reaches non-probate transfers at all.

Related terms

• Anti-lapse statuteThe rule that sends a gift to the children of a beneficiary who died before the person who made the will.
• BeneficiarySomeone who receives something because a document says so.
• Beneficiary designationA named person on an account or policy who receives it directly on death, without it passing through the will or probate.
• Beneficiary vs heirA beneficiary is named in a document. An heir is designated by statute when nothing names anybody.
• Designated beneficiaryThe person actually named on an account or policy. In the retirement-account rules it is also a narrower term, and an estate does not qualify as one.
• Disclaimer of inheritanceFormally refusing an inheritance, so that it passes as though you had died first.
• EstateEverything the person owned at the moment they died, treated as one thing that has to be settled.
• Per capitaA way of dividing an inheritance among the beneficiaries who are actually alive, so a deceased beneficiary's children receive nothing.
• Per stirpesA way of dividing an inheritance so that if a beneficiary has died, their share passes down to their own children rather than to the other beneficiaries.
• Primary beneficiaryThe first person in line on an account or policy, ahead of any contingent beneficiary.
• ProbateThe court process that confirms who has authority to deal with what somebody owned when they died.
• Simultaneous deathThe rule deciding who inherits when two people die together and the order cannot be established.

Sahvelo guidance that uses this

• When a beneficiary died first
• Beneficiary designations