Donee Beneficiary

AAA

DEFINITION of 'Donee Beneficiary'

A person who is considered a non-party in a contract but still receives a benefit from the completion of the contract. A donee beneficiary could also be the third party that benefits from a donation or gift. For example, Sam (donor) promises to gift a gold watch to Phil (donee). To get this watch Sam will buy it from Mike (third party). In this case, Mike is the donee beneficiary in Sam and Phil's exchange. If Sam went back on his promise, Mike would not sell the watch. Mike benefits but is not actually part of the contract.


Also known as a third party beneficiary.

INVESTOPEDIA EXPLAINS 'Donee Beneficiary'

A donee beneficiary has no rights to their benefits if they do not know that a contract exists. But the donee beneficiary has a right to file for damages if he/she has vested. For example, if the donor beneficiary knows about the contract and acts on it (in the example above, Mike might build the gold watch), he/she can sue the purchaser if they cancel the contract.

RELATED TERMS
  1. Third Party Beneficiary

    A person who will benefit from a contract made between two other ...
  2. Absolute Beneficiary

    A designation of a beneficiary that can not be changed without ...
  3. Discretionary Beneficiary

    Discretionary beneficiaries are those named in a trust or similar ...
  4. Named Beneficiary

    This term refers to any beneficiary named in a will, a trust, ...
  5. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
  6. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
Related Articles
  1. Home & Auto

    Why Your Will Should Name Designated Beneficiaries

    Find out how to make the tough decisions when it comes to choosing who will receive your assets and how they will be paid out.
  2. Retirement

    Designating A Trust As Retirement Beneficiary

    Designating a trust as your IRA beneficiary can be beneficial, but it requires proper planning to avoid problems.
  3. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  4. Retirement

    Mistakes In Designating A Retirement Beneficiary

    Make sure your beneficiary designations not only reflect your intentions but also meet the requirements to be effective.
  5. Retirement

    Can a spouse who is not named as a beneficiary receive assets from an IRA?

    It depends.Generally speaking, the designation of beneficiary form dictates who receives the assets from the individual retirement account (IRA). Therefore, no one else is entitled to receive ...
  6. Retirement

    My spouse is the primary beneficiary of my IRA. I also have a contingent beneficiary. Can my spouse ...

    A spouse who is the sole primary beneficiary of an IRA can always treat the IRA as his or her own. The contingent beneficiary on an IRA is never taken into consideration unless the primary beneficiary ...
  7. Retirement

    If an individual still has his or her former spouse as the beneficiary of an IRA, does the former spouse ...

    It depends. Generally, divorce does not effectively change a beneficiary designation unless the divorce decree makes a stipulation to change the beneficiary. It could be argued that the individual ...
  8. Retirement

    What do you do for a non-spouse beneficiary receiving a required minimum distribution (RMD) when the ...

    Unfortunately, a non-spouse beneficiary is not allowed to rollover assets from a qualified plan. Therefore, purchasing an annuity appears to be the only option for a beneficiary who wants to ...
  9. Retirement

    Can an IRA beneficiary roll the IRA over into another account and designate another beneficiary?

    It depends on the provision of the IRA plan document. Some (though very few) do not allow the designation of successor beneficiaries. The good news is that most do. If the beneficiary designates ...
  10. Fundamental Analysis

    What's a Tangible Asset?

    Tangible assets are property owned by a business that can be touched -- they physically exist. Examples include furniture and fixtures, computer hardware, delivery equipment, leasehold improvements ...

You May Also Like

Hot Definitions
  1. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  2. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  3. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  6. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
Trading Center