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LSDefine
Simple English definitions for legal terms
direct beneficiary
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A quick definition of direct beneficiary:
A direct beneficiary is a person who is intended to receive something as a result of a legal arrangement or instrument, such as a will or insurance policy. They are the person for whose benefit property is held in trust or who is designated to benefit from an appointment, disposition, or assignment. A direct beneficiary has the ability to enforce the contract and acquire rights under the contract once those rights have vested. They are different from an incidental beneficiary, who is not intended to benefit from a contract and does not acquire rights under the contract.
A more thorough explanation:
A direct beneficiary is a person who is intended to benefit from a legal arrangement or instrument, such as a will or insurance policy. They are the ones who receive the property or assets that are held in trust for their benefit.
- John's father left him a life insurance policy with John's wife as the direct beneficiary. If John were to pass away, his wife would receive the proceeds from the policy.
- When Sarah created a trust, she named her daughter as the direct beneficiary. Her daughter would receive the income from the trust during her lifetime.
These examples illustrate how a direct beneficiary is someone who is specifically named to receive the benefits of a legal arrangement or instrument. They are the primary recipients of the property or assets that are held in trust for their benefit.