When a person dies, it’s common to casually refer to his or her survivors as ‘heirs.’ However, when it comes to determining a survivor’s legal rights to an estate, it’s important to understand and use the term ‘heir’ correctly. 

The word ‘heir’ is derived from the word ‘inheritance’ and has its roots in the English language as “one who inherits, or is entitled to inherit, the property, title, honors, etc., of a dead man.” Historically, the term ‘heir apparent’ has referred to someone who is presumed to inherit property from an estate unless they are legally excluded by a legitimate will. 

Today, our legal system does recognize heirs and confer rights upon them; however, modern estate planning tools introduce the concept of beneficiaries, and there are important legal distinctions between heirs and beneficiaries. 

Beneficiaries vs. Heirs 

A beneficiary is someone designated through a Will, trust, or beneficiary designation to receive rights to a person’s asset or assets. 

An “heir” is a person who would receive assets that are held in a deceased person’s probate estate under a state’s intestacy laws (sometimes called the “laws of descent and distribution”) if the deceased person died without a valid Will, and if any assets remain after debts, expenses, and taxes have been fully paid. (A person’s probate estate will contain any assets that the person owned at his or her death and that were not subject to any right of survivorship or beneficiary designation.) Generally, a deceased person’s heirs are those living persons who are considered by applicable state law to be the deceased person’s closest relatives by blood or legal adoption (step-relatives and in-laws do not count). For example, a person’s spouse and children will be heirs. If a person dies with no spouse and no descendants, then, in Georgia, the person’s surviving parent or parents will be the person’s heirs, if either parent survives. If the deceased person had no spouse, no descendants, and no living parent, then the person’s siblings, if any, are next in line to be the person’s heirs. You cannot determine who a person’s actual heirs will be until the person has actually died. If a deceased person’s net probate estate does end up passing to that person’s heirs because the person had no valid Will in place, then that person’s heirs will also become the beneficiaries of that person’s estate. 

A person’s heir may or may not actually receive any assets: If the deceased person has a valid Will that, for example, leaves all of the person’s net probate estate to a charity, or to people who are not also heirs, then the deceased person’s heirs will receive no assets from the deceased person’s probate estate. However, in many states, such as Georgia, an heir will have certain legal rights, such as the right to receive notice that a Will has been offered for probate and the right to attempt to challenge the Will’s validity. 

Although the terms ‘heir’ and ‘beneficiary’ are often used as if they were interchangeable, they are not. A person can be an heir without being named as a beneficiary. A beneficiary isn’t necessarily also an heir. In any case, a person can never be named as an heir in a Will or any other estate planning document. A person either is an heir or is not an heir, and that status is determined by state law, not by an estate planning document. 

How to Designate Beneficiaries 

If a person wants to make sure that specific people receive that person’s assets after the person’s death, he or she can name those recipients as beneficiaries. Naming beneficiaries is generally done through a combination of estate planning legal documents and beneficiary designations. The estate planning documents that name beneficiaries are Wills and trusts. A Will can be used with or without an accompanying trust, and the Will can provide for the creation of trusts after the death of the person who wrote the Will. A trust can be irrevocable or revocable during its creator’s lifetime, and a trust can also provide for additional trusts to be created in the future, such as at the trust creator’s death or after the deaths of various trust beneficiaries. A beneficiary designation is normally a provision in a contract that directs one party to the contract to make a payment to a third party upon the death of the other party to the contract. Examples include beneficiary designations on life insurance policies and annuities, payable on death or transfer on death designations on checking, savings, or taxable investment accounts, and beneficiary designations on tax-deferred accounts such as IRAs and 401(k) accounts. A transfer on death deed is another form of beneficiary designation that was adopted by Georgia in 2024. 

Beneficiary designations differ from joint ownership with rights of survivorship, which often applies to joint accounts such as a joint checking account and can (but does not always) also apply to jointly owned real estate. A joint owner is an actual owner of the jointly owned asset. A beneficiary designation does not give the beneficiary any legal rights to the asset to which the beneficiary designation applies as long as the owner of the asset is still living. Instead, the beneficiary’s rights only take effect once the owner of the asset dies. 

If a financial account or life insurance policy does NOT name a designated beneficiary, the default beneficiary is often the owner’s estate. If an estate becomes the beneficiary of an asset under a beneficiary designation, that asset will become part of the owner’s probate estate. The beneficiaries will then be determined by either any valid estate planning documents (such as a Will or trust) that apply to the estate or state intestacy laws, if there are no valid estate planning documents in place. 

Who is Considered an Heir? 

When a person dies with no Will or trust in place, it’s called ‘dying intestate,’ and state laws then determine how the assets are passed down. Generally, the state will seek to identify ‘next of kin’ – also known as heirs. 

In Georgia, potential heirs only include a legally married spouse (not a fiancée or a former spouse) and then people who are related to the decedent through blood or legal adoption, such as parents, children and other descendants, grandparents, aunts, uncles, or cousins. Fiancées, stepchildren, and in-laws are not potential heirs. 

It’s not hard to imagine how things can get complicated when determining the rights of the next of kin. Having a well-drafted Will that names beneficiaries can avoid having state law send your property to whomever becomes your heirs and allows you to determine where your assets end up. Well-drafted estate planning documents can also help reduce the risk of post death disputes among heirs who are also would-be beneficiaries. 

The estate planning attorneys at Morgan & DiSalvo serve clients all over the Metro Atlanta area and would be pleased to answer your questions about estate planning and share their knowledge about the rights of heirs and beneficiaries. Please call (678) 720-0750 or email info@morgandisalvo.com.