Definition of beneficiary
beneficiary (plural beneficiaries)
- (law) One who benefits from the distribution, especially of an estate.
If any beneficiary does not survive the Settlor for a period of 30 days then the Trustee shall distribute that beneficiary's share to the surviving beneficiaries by right of representation.
A beneficiary (also, in trust law, referred to as the cestui que use) in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example: The beneficiary of a life insurance policy, is the person who receives the payment of the amount of insurance after the death of the insured. The beneficiaries of a trust are the persons with equitable ownership of the trust assets, although legal title is held by the trustee. The term can also be described as an "inheritance" used in the context for the party (heir or heiress) receiving the property related thereto. Beneficiaries in other contexts are known by other names: for example, the beneficiaries of a will are called devisees or legatees according to local custom.
Most beneficiaries, may be designed to designate where the assets will go once the owner(s) ceases to exist. However, if the primary beneficiary or beneficiaries are not alive or do not qualify under the restrictions, then the assets will probably pass to the contingent beneficiaries. Other restrictions such as being married or more creative ones can be used by a benefactor to attempt to control the behavior of the beneficiaries. Some situations such as retirement accounts do not allow any restrictions beyond death of the primary beneficiaries, but trusts allow any restrictions that are not illegal or for an illegal purpose.
The concept of a "beneficiary" will also frequently figure in contracts other than insurance policies. A third party beneficiary of a contract is a person who, although not a party to the contract, the parties intend will benefit from its provisions. A software distributor, for example, may seek provisions protecting its customers from infringement claims. A software licensor may include provisions in its agreements which protect those who provided code to that licensor.
In development aid project are called "beneficiaries" the persons and the communities that utilize the project outputs. They are the persons that the projects aim at empowering by giving development assistance or humanitarian relief. In an improper manner sometimes is called "beneficiary" also the Organization that receives a grant from a donor. This is more in line with the general legal terminology but generate confusion. It is an equivocal use of the term because the development projects are not done in order to benefit those who work at it, but those for whom the work is meant for.
Source: Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.