Contingent beneficiaries are persons, trusts, or estates that are designated to receive the assets of a deceased person in the event that the primary beneficiary is no longer able to assume those assets for some reason. Attorneys commonly recommend that wills contain a reference to at least one contingent beneficiary as a means of preparing a backup plan for the disposition of the property and other holdings of the deceased if necessary. It is permissible to name more than one contingent beneficiary and even to assign a specific order of succession to the additional listed persons or entities.

The concept of a contingent beneficiary is also often employed with insurance policies as well. For example, a life insurance may name a spouse or partner as the beneficiary of the proceeds from the policy upon the death of the insured party. At the same time, the terms of the policy may make it possible for the insurance company to award the proceeds of the policy to children, or other relatives and friends of the deceased, if those persons are named as contingent beneficiaries. This action would only take place if the main beneficiary was also deceased or otherwise declared to be ineligible to receive the proceeds from the policy.

Naming at least one contingent beneficiary in all insurance policies as well as in a will is one way of ensuring that loved ones or a cause that is close to the heart is provided for once the death of an individual takes place. The structure for a contingent beneficiary can be very simple, with no qualifications to be met, other than being in a position to take control of the assets. However, the provisions for delivery can also be more comprehensive if desired.

For example, a will may state that all assets go to the spouse as the main beneficiary. In the event that the spouse is alive but determined to be unable to handle the estate, a child may be named as the contingent beneficiary, with the proviso that the child uses the assets of the estate to care for the spouse until his or her death. Once the main beneficiary passes away, the terms of the will could direct that the remainder of the estate be granted directly to the child.

Many people choose to make use of a contingent beneficiary option with both insurance policies and wills. The end result is that the disposition of assets is not complicated due to unforeseen events, such as the death of the main beneficiary. By creating a backup plan for the disbursement of property and other holdings, it is possible to be sure that the estate is put to good use after death.