A real estate beneficiary is an individual or an entity who legally receives real property assets from a benefactor.
While beneficiary is a common term used in the insurance industry, it is associated with the transfer of ownership of highly valuable assets in the real estate industry.
While those who receives assets from the will of a deceased are known as beneficiaries, descriptions can get more specific.
For example, when personal property is received via the will of a deceased, the receiver is a legatee.
And when a person receive real property by virtue of provisions contain in a will after the death of the owner, he or she is known as a devisee.
It must be noted however, that death is not necessary for a benefactor to give to a beneficiary.
Someone well and alive can very well decide to gift real estate to another person who is unrelated to him or her.
It is important to be mindful that according to intestate law, the people with inheritance to a demised person’s assets are known as heirs, which can also be classified as beneficiaries.
This means that heirs are beneficiaries, but beneficiaries are not necessarily heirs.
Distribution of real estate assets
The distribution of real estate assets are not as straight forward as other classes of assets due to the various types of property ownership that one can own property.
When we discuss the distribution of estate assets after the death of someone, we often think about the probate process which would allow the law to ensure fairness to all parties and beneficiaries named in wills.
When there is no will, then intestate succession would determine the beneficiaries of the estate belonging to the deceased.
However, that is assuming assets left behind do get to the stage of probate.
A property that is held in joint ownership for example, would have the deceased share of the property transferred to the surviving joint-owner.
The result of this is that such a property would be owned by someone else the moment a joint owner passes away, removing it from the estate that would be distributed according to a will.
It might be fine when the surviving owner is a family member. But when he or she is not related to the family, then it can be a source of conflict and disharmony.
Because of the special value that we assign to real estate, it is often perceived as the best asset class and most valuable.
They hold value much better than stocks, have a far better longevity than bonds, and even outperform gold.
This is backed up by lenders and banks as they would be willing to approve almost anything when real property are pledged as collateral.
So if you are writing a will or contemplating drafting one, consider that the person(s) who get the house would almost certainly feel that you loved him or her the most, and would be perceived by family members to be so as well.
Leaving one with the house is the ultimate validation.
