A contingent will is a type of legal document used to name beneficiaries who will receive assets upon an individual’s death. It is different than a last will and testament because it does not take effect until a certain event occurs. The event specifies in the will can be whatever the maker of the will decides.
How Does a Contingent Will Work?
For example, let’s say John wrote a contingent will and specified that his son, David, would receive his assets only if John passed away before the age of 65. In this case, David would have to wait until John turned 65 for the will to be effective and the assets to pass to him. The same concept applies to any other conditions outlined in the contingent will.
What Are Some Examples of Contingent Wills?
Contingent wills can be used to protect assets and can also be used to ensure that property or other assets pass to people as intended. Some examples of contingencies in a will could include:
- Distribution of assets to a beneficiary upon marriage or divorce
- Distribution of assets to a beneficiary upon the death of a specific individual
- Distribution of assets to multiple beneficiaries upon the death of a certain age or over a certain amount of time
- Distribution of certain assets only after a business is sold or dissolved
Why Should I Have a Contingent Will?
There are several reasons why it might be smart to have a contingent will in place. It can be used to protect assets and plan for future events or circumstances. It can also be used to manage assets upon an individual’s death in a way that satisfies their wishes. Additionally, a contingent will can help ensure that assets are passed to intended beneficiaries.
Creating a contingent will allows individuals to specify the exact conditions for passing on assets and also protects their interests and those of the beneficiaries in the event of unexpected circumstances. It is an important and necessary part of estate planning.