What is a Contingent Beneficiary?

A contingent beneficiary is someone who inherits either if the primary beneficiary cannot, or if certain conditions have been fulfilled.

To put it into an example, if you decide to leave your house to your three children, you may place the eldest as the primary beneficiary of the house and name your second child as the contingent beneficiary.

If something happened to your eldest, that way the home would be the sole inheritance of the second, rather than being split between the second and youngest child. Alternatively, a contingent beneficiary describes someone who must fulfill a certain condition before they can claim their inheritance, such as graduating from college or reaching a certain age.

Contingent Beneficiaries in Wills and Trusts

The main role of the contingent beneficiary is to exercise more granular control over how you wish your assets to be distributed within the family. It allows you to create backup plans should your primary beneficiaries be unable to receive an inheritance by the time you pass away; if you’ve passed away before you’ve had the chance to amend your estate plan (or if they passed away shortly after you did, but before your estate was probated and distributed).

In other cases, a contingent beneficiary serves as a description for beneficiaries of a trust who must fulfill certain conditions before they can receive the principal share of the trust that they are entitled to.

It is important to note that contingent beneficiaries are not second-class beneficiaries. They are entitled to the same representation and fiduciary duty, meaning a trustee must respect the interest of the contingent beneficiary as much as the interest of the primary beneficiary. All that changes is the order in which something is inherited.

Primary beneficiaries can also choose to forfeit their inheritance. In this case, a contingent beneficiary is next in line to inherit. Similarly, if the primary beneficiary has killed the decedent, then under the Slayer Rule, their inheritance is forfeited to the contingent beneficiary.

You can split property between different beneficiaries based on what order they are slated to inherit. For example, if you leave your home to your surviving spouse instead, you can name all three of your children as contingent beneficiaries, granting each a 33 percent stake in the house. Or, you can decide to name them all as primary beneficiaries, giving 50 percent to your spouse, and 50 percent to the kids. It all depends on what you intend to do with what you own, and how you wish for it to be distributed and used after your death. To recap:

      1. Primary beneficiaries inherit first. Contingent beneficiaries inherit second, third, and so on.
      2. Both primary and contingent beneficiaries can inherit an account or property together, and the value of the item can be split into percentage-based ownership. E.g., if only one party wants to sell, they have to buy out the other owners. Alternatively, all parties can agree to a sale and split the profits accordingly.
      3. Estate plans are flexible. Whether or not you plan to have primary and contingent beneficiaries or just primary beneficiaries depends on what you own, and how you intend for your financial and material legacy to be used.

When Are Contingent Beneficiaries Relevant?

Contingent beneficiaries aren’t exclusive to wills. You can write them into trusts, life insurance policies, retirement accounts, other bank accounts, and as beneficiaries of property via a transfer-upon-death (TOD) clause.

Whether or not a contingent beneficiary is necessary for your estate is a matter to discuss with your estate planning professional. It can depend on how your estate is split, the total size and value of your estate in relation to local estate tax and probate process laws. But most of all, it depends on your concerns regarding the potential need for a contingent beneficiary, given certain lifestyle risks, health conditions, or a strained relationship between you and your primary beneficiary.

For the most part, contingent beneficiaries play the role of ensuring that the assets you intend to distribute among your loved ones stay within the family.

For example, consider if you left a sizeable investment property to one of your eldest children, who subsequently passed away shortly after you did, but before the estate was probated. Alternatively, we can consider the contents of a trust – although there is no probate process, it can still take time to administrate and distribute the contents of said trust.

With your eldest gone, their share will likely go to their estate, at which point it will be distributed based on their own estate planning, or lack thereof. In most community property states, half of everything goes to the surviving spouse, alongside all co-owned property held in marriage. If your eldest was survived by a spouse and/or children, then the share of your estate may become theirs, and everything stays within the family.

But what if your eldest child got into marital trouble, or their partner was estranged? What if they remarry and pass on the property to children from their new marriage? The same investment property you had designated for your children and grandchildren?

If your primary beneficiary leaves behind a surviving spouse who was estranged from the family, you would posthumously have no control over the fact that your beneficiary’s share would go largely, if not entirely to them. A contingent beneficiary allows you to make sure that whatever happens, be it ineligibility, incapacity, refusal, or death, the things you leave behind go on to benefit your loved ones.


Designating a beneficiary supersedes whatever is stated in your will. This is particularly important, as it means that even if you amended your will more recently, it cannot override a designation you might have made years prior.

Designations can be changed at nearly every avenue, with a few exceptions (irrevocable trusts being the biggest). Naming designated beneficiaries can massively reduce the bloat of your estate come probate, and help your family expedite the process, and get on with living their lives to the fullest.


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