The Restatement of Contracts §133 divides the intended beneficiary into two categories donee and creditor. Meanwhile, even if the promise is not made to them directly, they may still enforce the contract. The beneficiary may be named in a contract to have contractual rights, but it is not necessary for them to be identifiable at the time the contract is formed. Classifications: Intended third-party beneficiary:Īn intended beneficiary is an identified third-party that contracting parties intending to give them benefits via their promised performances, like doing or not doing something or paying money. However, there is an exception if the person is an intended third-party beneficiary and their rights of the contract are vested, then they have the same rights as the parties of the contract. If a person is not the original party to a contract, they usually cannot enforce the contract or assert a claim of a breach of contract against any party. The mother is the promisee, the son is the third-party beneficiary, and the insurance company is the promisor.A promisee is a party who pays consideration to obtain the promisor’s promise.įor instance, a mother purchased medical insurance for her son from an insurance company. A promisor is a party that makes promises to benefit the third-party beneficiary. The privity of the contract is between the contracting parties - promisor and promisee. Then, the court may authorize others to replace the trustee who violates rules.Ī third-party beneficiary is a person who is not the contracting party of a contract, but can receive benefits from the performance of the contract.Trust beneficiaries also have the right to request a special accounting from trustees or take legal actions in probate court if they think the trustees’ misbehaved in their fiduciary role.If they believe that the executor is not transparent as they are required to do, or that they mismanaged the estate, beneficiaries can request to review the estates or even sue the executor.Before distribution, they have a right to receive estate information from the executor.The beneficiaries of a will only have rights over their share of the distributed inheritance. A charitable trust without a beneficiary or specific purpose will fail unless the court selects a beneficiary or purpose consistent with the grantor’s intent. Thus, they cannot be enforced beyond 21 years. The rule against perpetuities is applied to these trusts. Trusts for general but non-charitable purposes and trusts for a specific non-charitable purpose may be enforced without ascertainable beneficiaries. But here are exceptions created by the Uniform Trust Code. The definite-beneficiary rule of express trust requires that the identity of the beneficiary be ascertainable. The property includes real estate, personal property (e.g., art or jewelry collections, car, and books), financial assets (e.g., cash, bank accounts, and stocks), and so on. But the same person cannot be the sole trustee and sole beneficiary. Natural persons, corporations, or other organizations like charities can all be beneficiaries. A beneficiary is usually definitive, which is reasonably ascertained now or in the future. Wills and Trusts:Ī beneficiary is an individual named in a will, revocable trust, or irrevocable trust to receive property from a testator or grantor. A beneficiary is an individual who receives benefits from a transaction via a contract (such as an insurance policy), a will, or trust.
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