Who is defined as the individual named to receive the benefit of the funds in an account/plan?

The individual defined as the one named to receive the benefit of the funds in an account or plan is known as the designated beneficiary. This term specifically refers to the person who is entitled to the benefits or assets contained within a particular financial account, such as a retirement account or life insurance policy, upon the account holder's death or under specified circumstances.

The designated beneficiary has legal rights to these assets, which are transferred to them without going through probate, making this designation a critical aspect of estate planning. The concept ensures that the intentions of the account holder regarding the distribution of their funds are honored and simplifies the process for the beneficiary at the time of the account holder’s death.

In contrast, the account holder is the individual who owns the account; the trustee is responsible for managing the assets within a trust according to the terms set forth in the trust document; and the financial advisor provides guidance and advice regarding financial matters. While all of these roles are important within the financial realm, it is the designated beneficiary that specifically refers to the individual intended to receive benefits from the account or plan.