Understanding the difference between an heir and a beneficiary

When it comes to estate planning and probate in Minnesota, the terms heir and beneficiary are often used interchangeably, but they have distinct legal meanings.  Understanding these differences can help individuals navigate inheritance matters more effectively. Definition of an heir in Minnesota An heir is legally entitled to inherit assets from a deceased person’s estate when there is no valid will. Under Minnesota law, heirs are determined by intestate succession laws, which outline who inherits and in what proportions if the decedent died without a will.  The deceased’s spouse and children are typically the first to inherit, followed by parents, siblings and extended relatives if closer family members are not alive. For instance, if a Minnesota resident passes away without a will, the surviving spouse may receive the entire estate if there are no children. However, if the children are from another relationship, the estate may be split between the spouse and the children. Definition of a beneficiary in Minnesota On the other hand, a beneficiary is an individual or entity named in a will or other legal document, such as a trust or life insurance policy, to receive specific assets or benefits. Beneficiaries do not need to be related to the decedent and may include friends, charities or organizations. Beneficiaries are only entitled to what is specified in the will or document, whereas heirs receive assets as defined by state intestate laws. Key differences The main difference is that heirs inherit by default under state law when there is no will, while beneficiaries are specifically named in a will or estate plan. Minnesota law clearly distinguishes between these roles to ensure proper distribution according to the decedent’s wishes or, in the absence of a will, according to state law. Understanding these distinctions is crucial for estate planning and navigating probate to ensure rightful inheritance.The post Understanding the difference between an heir and a beneficiary first appeared on Scott + Hespen Law, PLLC.