Beneficiary Definition in Texas

In general, a beneficiary is someone who benefits from something. In legal terms, a beneficiary is someone who is legally entitled to receive property or money according to the terms of an insurance policy, will or trust. The state of Texas recognizes the different types of beneficiaries and has laws on the books that detail the distinctive types.

Texas Regulations

Under Texas law, the Probate Code as it's known, deals with beneficiaries named in the last will and testament of an individual and those beneficiaries that are entitled to receive property from another. The Property Code outlines regulations pertaining to the beneficiaries of trusts. The Texas Department of Insurance defines who is termed a beneficiary of insurance policy payouts.

Probate Code

In the Texas Probate Code, a person defined as a beneficiary is described in several circumstances, the first being as an heir to an inheritance as outlined in a will. The Probate Code also defines a beneficiary as the recipient of property in a survivorship agreement made between spouses or between joint tenants. A beneficiary may receive proceeds from an annuity, pension fund or other type of retirement plan if named in an agreement.

Property Code

As the term pertains to the recipient of a trust, the Texas Property Code defines a beneficiary in the general provisions as anyone for whom property is held in trust for their benefit. The law specifically states that this is "regardless of the nature of the interest." The Texas Property Code goes into detail as to the legal rights and obligations of a beneficiary of a trust. This section of the Texas statutes also provides full details as to how trustees must perform their legal obligations to fulfill their responsibilities in the relationship with a beneficiary.

Insurance Guidelines

The Texas Department of Insurance defines a beneficiary as an individual, multiple individuals, or an entity that has been previously chosen to receive the proceeds of a life insurance policy or annuity contract as death benefits. The state insurance department also defines "contingent beneficiary" specifying that this is a secondary person or persons who will receive death benefits from a life insurance contract if the first-named beneficiary should die before the insured person. [5] The insurance department also posts a definition for an "irrevocable beneficiary," stating that this is a person with conclusive rights to the death benefits of a life insurance policy. The benefits due an irrevocable beneficiary cannot be changed by the owner of the insurance contract without the unambiguous permission of the beneficiary.

References

• Texas Constitution and Statutes: Probate Code Chapter II Descent and Distribution
• Texas Constitution and Statutes: Probate Code Chapter III Determination of Heirship
• Texas Constitution and Statutes: Property Code Chapter 111 General Provisions
• Texas Constitution and Statutes: Property Code Chapter 114 Liabilities, Rights, and Remedies of Trustees, Beneficiaries and Third Persons
• Texas Department of Insurance: Glossary of Common Insurance Terms
• U.S. Securities and Exchange Commission: Variable Annuities: What You Should Know