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Who Takes Priority? The Different Levels of San Diego Trust Beneficiaries

Did you know that not all beneficiaries are created equal? There are different levels of beneficiaries in California Trust and each level has different rights and priorities when it comes to Trust distributions.

For current beneficiaries, there are three basic levels: (1) specific gift Beneficiaries, (2) general gift Beneficiaries, and (3) residue or remainder Beneficiaries.

1. Specific Gift Beneficiaries.

A specific gift beneficiary receives a specific piece of property, such as a named parcel of real property or a particular item of jewelry or art. Specific gift beneficiaries are the highest form of beneficiaries and they must receive their specific item before any of the other beneficiaries receive anything. The only people who are paid before specific gift beneficiaries are creditors, taxes, and trust expenses.

2. General Gift Beneficiaries.

These are gifts of a specified amount of money. For example a gift of $5,000 or $10,000 or $25,000, something like that. General gift beneficiaries come after the specific gifts are made and before the residue is paid out.

3. Residue or Remainder Beneficiaries.

They get all the rest. Whatever is left over goes to the reside or remainder beneficiaries. At time, the residue beneficiaries could be the biggest beneficiaries of the estate or Trust. Other times, the residue beneficiaries get less or even nothing out of the estate. It all depends on the overall value of the estate or Trust to begin with.

Aside from current beneficiaries, there are also vested or contingent remainder beneficiaries. These are the people who will receive the Trust assets after the current beneficiaries pass away. A vested remainder beneficiary will get their interest no matter what occurs, they just need to wait for the current beneficiaries to be done. A contingent, remainder beneficiary will only get something if a specified event occurs, such as another person dying before the Trust Settlor.

That is a quick rundown of the different types of beneficiaries you will encounter in your Trust or Will matter.