Beneficiary

In trust law known as ‘cestui que use’ a beneficiary can be natural person or an entity of legal stature who is entitled to receive money or other assistances from another person known as his ‘Benefactor’. For instance in case of life insurance, the beneficiary is entitled to receive payment amounting up to the value of the insurance when the insured dies. As far as a trust asset is concerned, trust asset’s beneficiaries are its equivalent owners, only the legal title is of the trustee. Similarly when an heir or heiress are in question, the related property received thereafter is may also be referred to as ‘inheritance’. In case the owner(s) of a trust asset ceases to exist it remains within the authority of the beneficiary to delegate its ownership to another person. There are two types of beneficiaries, primary and contingent. Upon the extinction of primary beneficiaries the asset concerned may move to contingent beneficiaries. The behavior of beneficiaries may as well be influenced by a benefactor as he may impose restrictions such as getting married, etc. Although only in case of retirement accounts, no other restrictions beyond death shall be imposed, other than that, all legal restrictions are allowed by the trust.

Perception of a beneficiary prevails not only in insurance policies but in other contracts as well. For instance in case of a third-part beneficiary, the beneficiary reserves the right to reap benefits from the provisions of a contract even when the beneficiary might not be a party toward the agreement. A popular example of this is Microsoft. Users of the software provided by the Microsoft are benefited by the monument against software infringements, although they are not a party toward that proposal but they still benefit from it.

When we talk about development aids every person and every community that benefits from the aid are referred to as beneficiaries. Although certain speakers and publication wrongly address people who receive benefits from the donations made to them as ‘beneficiaries’.