DEFINITION of 'Beneficiary'

Anybody who gains an advantage and/or profits from something. In the financial world, a beneficiary typically refers to someone who is eligible to receive distributions from a trust, will or life insurance policy. Beneficiaries are either named specifically in these documents or they have met the stipulations that make them eligible for whatever distribution is specified.


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BREAKING DOWN 'Beneficiary'

Typically, any person or entity can be named as a beneficiary of a trust, will or life insurance policy and the one distributing the funds (the benefactor) can put various stipulations on the disbursement of funds (e.g. the beneficiary must have attained a certain age or be married). There can also be tax consequences to the beneficiary. For example, while the principal of most life insurance policies is not taxed, the accrued interest might be.

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  1. Can mutual funds have beneficiaries?

    The ownership of a mutual fund account can allow for beneficiaries depending on how the account is registered. For example, ... Read Full Answer >>
  2. Do beneficiaries of a trust pay taxes?

    Beneficiaries of a trust typically pay taxes on distributions they receive from the trust's income. However, they are not ... Read Full Answer >>
  3. What are the risks involved in a banker's acceptance?

    College savings accounts are excellent ways to encourage saving for future college costs. Contact your investment professional ... Read Full Answer >>
  4. How can I reduce the taxes on my inherited retirement assets?

    Many beneficiaries miss out on one of the most significant tax deductions for inherited retirement-plan assets; the income ... Read Full Answer >>
  5. Can an IRA owner disclaim his widow's account but exclude one spendthrift contingent ...

    F rom your question, it appears that the widow is the sole primary beneficiary, in which case any portion properly disclaimed ... Read Full Answer >>
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    That is unusual. Contact his employer again and if you are not satisfied with the response, ask to speak with a supervisor ... Read Full Answer >>

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