A contingent beneficiary stands second-in-line to inherit assets such as a life insurance policy, a retirement plan or an annuity. Typically, the owners of such assets will designate their spouse as a primary beneficiary. But if both spouses die at the same time, their children, or trusts designated to act in their minor children’s names, might stand as contingent beneficiaries.
As with primary beneficiaries, the assets of such accounts pass to contingent beneficiaries regardless of the dictates of a will and without passing through probate court. That may be less expensive, but it puts an added burden on account-holders to make sure their beneficiary arrangements are up to date at all times.