Glossary
Beneficiary
A beneficiary is the person or entity designated to receive an account or insurance benefit when the owner dies.
Retirement accounts, life insurance, and many bank and brokerage accounts pass by beneficiary designation — the form on file with the institution — not by the owner's will. An outdated form generally wins over a newer will, which is how ex-spouses sometimes inherit accounts by accident.
Why it matters in practice
Reviewing designations after marriage, divorce, births, and deaths is one of the cheapest pieces of estate hygiene available. Naming contingent (backup) beneficiaries matters too, since a sole primary beneficiary who has already died can send the account into probate.
In California
California is a community property state: a married account owner generally needs the spouse's written consent to name someone other than the spouse as primary beneficiary of certain retirement assets, and community property rules can affect what a designation actually controls.
Related terms: Trust · IRA (Individual Retirement Account) · Required Minimum Distribution · Rollover