Legatee

What Does Legatee Mean?

A legatee is an individual or entity designated to receive assets after a person’s death. These assets are allocated to the legatee through a will.

In the context of insurance, life insurance policies are often placed into trusts, in which case the trust itself becomes the legatee. If you’re naming a person directly instead of a trust, it helps to understand how a life insurance beneficiary collects a payout so the legatee knows what to expect when the time comes.

Insuranceopedia Explains Legatee

Although both legatees and heirs receive assets after someone’s death, they differ in key ways. Heirs are typically blood relatives of the decedent, such as children or grandchildren. Legatees, however, do not need to be related by blood.

When a trust is designated as the legatee, the assets are passed to its beneficiaries according to the trust’s terms. Establishing a trust to pass assets to a legatee can help reduce certain taxes and ensure that the assets are distributed as intended. Reviewing the most common life insurance beneficiary mistakes before finalizing the policy can prevent disputes later, especially when both a trust and named individuals are involved.