Beneficiary
The beneficiary is the person, entity, or other party that is the recipient of a benefit; the most common example is the person who is named in a life insurance policy as the one who will receive payment upon the death of the insured.
A beneficiary may also be an heir, or an individual, institution or corporate entity that is entitled to receive revenue from a trust. In the case of inheritance, the beneficiary is often called a "contingent" beneficiary; proceeds of a trust are only paid if another event occurs (such as the death of a parent or another beneficiary). When it comes to a trust, a beneficiary may be an income beneficiary, meaning the person or persons in question may receive income, but not the principal of a trust.
Call us at (888) 360-4215 to speak with a mesothelioma paralegal
Other examples of a beneficiary include a person or legal entity holding a letter of credit, who may then demand payment from whoever issued the letter.
A "third-party" beneficiary is an individual or legal entity that receives any benefits under the term of a contract or other legal agreement between two other parties. This person or entity may be a direct beneficiary or an incidental beneficiary. In the case of the former, the contract or agreement between the two parties was intended to benefit the person or entity on question. On the other hand, an incidental beneficiary receives a benefit as a result of the contract or agreement even though the terms did not specifically call for it.
For example, Mr. Brown and Mr. Wong operate a business together. Mr. Brown becomes the direct beneficiary of a deceased relative's estate, and chooses to invest those monies by making upgrades to the business which increases its value. Since Mr. Wong is a partner in the business, he becomes an incidental beneficiary.