An heir is a person who is eligible for inheriting the estate of a deceased person in the absence of a will or trust. People often believe that heir and beneficiaries are interchangeable words. However, these two terms are different from each other. An heir can also inherit a part of the assets that are not included in the will.
In the following article, we have given in-depth detail of the term heir better to understand the meaning and role of an heir. Moreover, we have discussed how an heir is distinguished from a beneficiary.
Meaning Of An Heir
If a person passes away without creating a will or trust, then the individual who, according to the law, is capacitated to inherit the former's estate. The estate includes one's property, stocks, vehicles, jewelry, art pieces, furniture, etc.
The heirs usually are close family members, like children and siblings. In the case there is a presence of two or more persons with the same relation to the deceased person, the assets are divided equally among such individuals. For instance, a person may have two children; in that case, both of the children get an equal share in the estate.
There are numerous types of heirs, including an heir apparent, adoptive, presumptive, and collateral heir. An heir apparent is the heir who is most commonly considered as an heir like children, siblings, etc.
As the name suggests, an adoptive heir is a lawfully adopted child. Such individuals have equal rights as other biological members of the family.
A presumptive heir is the one who is regarded as the heir according to the present conditions. However, in the occurrence of a newborn who is more eligible to inherit, can debar the right of succession from that heir.
A collateral heir includes a person who is not directly related to the deceased but is a part of the family.
Difference Between An Heir and Beneficiary
When a person prepares a trust, they have the power to designate the beneficiaries. These chosen beneficiaries will get the benefits of the estates after the death of the trustor.
The estate will be distributed as per the terms of the trustor. The distribution doesn't need to be equal as in the case of heirs with the same relation to the deceased.
All the heirs will inherit the assets according to the state laws in the absence of trust. However, it is possible that the trustor does not include an heir in the trust. In that case, the heir will not get any profits from the estate. The people who are not biologically related, like friends, to the trustor cannot be the heirs. Although, such individuals can be the beneficiaries of the trust.
Consequently, in general, we can say that an heir inherits the property when a trust is not created. An heir can only be close relatives, while a beneficiary can be anyone, whether genetically related or not. In fact, a trustor can decide not to make a possible heir a beneficiary.