What Is the Difference Between an Heir and A Beneficiary?

Estate planning frequently involves drawing up a will with the intention of leaving specific assets to relatives, friends, charities, or others. Unless told about the contents of the will beforehand, a close relative might not know if he or she receives anything. Many South Carolina heirs may assume they will receive property based on blood relationships, but the assumptions may derive from a misunderstanding. An “heir” is not automatically a “beneficiary” in a will.

The Differences Between Heirs and Beneficiaries

The differences between an heir and a beneficiary are more than semantic ones. Under estate law, there is a significant difference between the two. However, an heir could be a beneficiary, and a beneficiary might not be an heir. In fact, sometimes, an heir is not a beneficiary.

An heir is a blood relative whereas a beneficiary is a person or entity that receives assets in a will. A person may name an heir as a beneficiary, and that person receives stipulated assets. However, a testator could leave everything to charity. While not an heir, the charity is a beneficiary.

Without a valid will, intestate laws guide the court towards making a decision. Specific heirs become beneficiaries based on intestate succession laws. Persons who are not heirs would have no standing in intestate succession proceedings.

Be aware that some assets pass outside of probate to named beneficiaries, such as life insurance policies, bank accounts, and more. Heirs may or may not be the listed beneficiaries.

Challenges to The Will

An heir who feels unfairly left out of a will may attempt a probate court challenge. Contesting the will involves probate litigation and could delay the closing of the estate. Those who feel that “unfairness” provides sufficient reason to challenge the document may end up disappointed in court because the court looks at particular circumstances when reviewing challenges. Fraud or the lack of the testator’s mental capacity might deliver compelling legal reasons for reversing or invalidating a will’s directives.

Effective and reliable estate planning could reduce the chances of any challenges to estate administration. An attorney could review a will to increase the likelihood that the text appears sound.