What Does Legatee Mean?
A legatee is an entity that receives assets after a person dies. These assets have been assigned to the legatee through a will.
In the context of insurance, life insurance policies are often placed into trusts. In these cases, the trust becomes the legatee.
Insuranceopedia Explains Legatee
Although they both receive assets after someone has died, legatees are different from heirs. Heirs are typically blood relatives of the decedent, such as sons, daughters, or grandchildren. Legatees, on the other hand, do not have to be blood relations.
When the legatee is a trust, the assets are passed on to the beneficiaries according to the terms of the trust. Setting up a trust to pass assets on to a legatee can allow certain taxes to be circumvented and to make sure the assets are distributed as intended.