What Happens if My Contingent Beneficiary Is Dead?

by Wanda Thibodeaux

When you invest or plan your estate, you will likely want to name both a primary beneficiary and contingent beneficiary of your assets and investments. The primary beneficiary is the person who gets your property or investments first. If for some reason the primary beneficiary cannot collect, or dies before you do, then the contingent beneficiary can claim the property or assets. It is also possible that your contingent beneficiary will pass away before you do.

Other Beneficiaries

In some instances, a person who has a will, life insurance policy or similar document or account may list more than one contingent beneficiary. This is usually done as a safeguard against having no remaining beneficiaries, or because the owner of the assets wants to spread out their wealth among multiple people. For example, a mother may name her husband as the primary beneficiary, and her two children as contingent beneficiaries. If there are any remaining contingent beneficiaries when a contingent beneficiary passes away, then the assets would go to those beneficiaries.

No Remaining Beneficiaries

If there are no contingent beneficiaries remaining for a will or similar document or account, then typically whatever assets were involved revert back to the estate of the insured or investor. When this happens, the assets become the property of the estate, which the government treats as a separate entity.


If one contingent beneficiary passes away and other beneficiaries are still alive, then the only real ramification of the beneficiary's death is that his share of the assets usually are split among the remaining beneficiaries. This means the remaining beneficiaries get a larger percentage of the assets than they would if all the beneficiaries were alive. Because the assets revert back to the estate, the costs associated with the estate will rise. Anyone who has a legitimate claim against the estate can file a motion in court to take ownership of the assets, including creditors and lenders. Heirs that normally would not be entitled to the assets, and whom the owner of the estate did not intend to have the assets may receive them. Additionally, the probate process becomes more complicated, which can delay settling the estate and distributing the assets to the rightful owner.

Bottom Line

Naming only one contingent beneficiary may not be enough to distribute your assets the way you want. It also may mean it becomes harder to get the assets to whomever should have them. Thus, multiple contingent beneficiaries are usually a good idea. Contingent beneficiaries do not have to be a person. They also can be businesses, charities or other organizations. Most investments do not place a limit on the number of contingent beneficiaries you can name.

About the Author

Wanda Thibodeaux is a freelance writer and editor based in Eagan, Minn. She has been published in both print and Web publications and has written on everything from fly fishing to parenting. She currently works through her business website, Takingdictation.com, which functions globally and welcomes new clients.

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