When creating a will, one of the most important decisions you'll make is naming your beneficiaries. This article explains who beneficiaries are, the different types you may name in your will, and how these differ from beneficiaries in other legal or financial documents.

A beneficiary is the person or organization who will receive a gift or portion of your estate after your death. This can include:

You can leave specific gifts (e.g. a piece of jewelry or a set amount of money) or a percentage of your residue estate to a beneficiary. Keep in mind that specific gifts are given when you pass away and are not part of your residue.

You can assign beneficiaries who live in another province or country. However, each country has its own rules for taxing inheritances. It's advisable to consult a tax specialist to understand how the inheritance would be taxed in their country of residence, as this is beyond the scope of what Willful can assist with.

Your executor can also be a beneficiary. This is common with spouses or adult children in a will.

You cannot add unborn children as a beneficiary, but you can always update your will once the child arrives and add them in your Willful account.

This is the first person (or group) in line to receive a specific gift or share of your estate. Most people name multiple primary beneficiaries to cover all parts of their estate.

Also known as an alternate beneficiary, this person will receive the gift if the primary beneficiary dies before you or cannot accept the gift. It's a good idea to name backups to ensure your intentions are followed even if circumstances change.

You can also appoint a charity or organization as a backup or contingent beneficiary. This means they would receive part or all of your estate if none of your primary beneficiaries can.

Contingent beneficiaries receive a gift only if a specific condition is met. For example, you might state that a grandchild receives a gift only if they reach a certain age. This type of beneficiary is often used for minors or complex family situations.

Contingent beneficiaries serve as the ultimate backup. If everyone named in your will has passed away, these individuals or organizations will receive the remaining estate. You can add as many contingent beneficiaries as you'd like in Willful, and they will split the proceeds equally. It's important to choose someone not already listed as a beneficiary. If you're unsure who to pick, a charity is a helpful fallback.

When you create your will, you might not have minor beneficiaries. However, this could change by the time you pass away. Willful includes a clause to address this possibility:

Willful cannot account for children not yet born. If you want your will to include provisions for unborn children, it's best to speak with a lawyer. Otherwise, you can create your will now with existing children and update it after a new child is born. Remember to legally execute the updated will.

Some people find it tricky to split their estate using percentages, especially when dividing it among three beneficiaries. For example, setting each beneficiary’s share to 33.33% adds up to 99.99%, which causes an error. To fix this:

This small change ensures the system recognizes a complete 100% allocation.

When allocating your estate, you'll be asked what should happen if a beneficiary passes away before you. You have two options:

If you have only one beneficiary, the only option available is to go directly to their children. To enable the second option, add more beneficiaries.

Tip: If you want one person to inherit your estate, but don’t want their share to go to their children if they pass away first, you can:

Your will isn't the only place where beneficiaries are named. Many financial and legal documents allow or require you to list beneficiaries directly. These may include:

Tip: Review and update your beneficiary designations across all documents regularly to ensure consistency and accuracy. Because these designations take precedence, there is no need - and no place - to list your life insurance in your will.

Quebec law requires you to appoint a legatee in your will for any registered savings plans (like an RRSP) or pensions to gift them to someone specific. You must appoint your spouse as a legatee of any registered plans or pensions to trigger a spousal rollover, which allows the value to transfer without a tax liability.

To do this on Willful, leave these plans as a specific legacy on the "Legacies" page. Use language such as: “All my rights in any RRSP, RRIF, TFSA, or pension.” You don’t need to include account numbers unless referring to a specific account.

If your spouse foregoes the rollover, they will be responsible for any resulting tax liability.