An alternate beneficiary is someone who will benefit from or gain ownership of property only if the primary beneficiary is unable or unwilling to take ownership. An alternative beneficiary in property law arises when someone bequests property to someone else, and if that person does not want or is unable to accept the property, the property can be willed to a designated alternative beneficiary. A person may refuse to accept property from a will for various reasons including trying to avoid taxes resulting from the gift. In insurance policies, a policyholder can set an alternative beneficiary for certain policies like life insurance if a primary beneficiary passes before the policy benefits can be claimed.
[Last updated in June of 2021 by the Wex Definitions Team]