Question

If the beneficiary dies shortly after the payments begin, what will happen to the balance of the principal?

1) It will be forfeited
2) It will be returned to the beneficiary's estate
3) It will be distributed among the remaining beneficiaries
4) It will be donated to a charity

Answer 1

If the beneficiary dies shortly after the payments begin, the balance of the principal will be returned to the beneficiary's estate.

Step-by-step explanation:

If the beneficiary dies shortly after the payments begin, the balance of the principal will be returned to the beneficiary's estate. When a beneficiary dies, the remaining funds are typically distributed according to the deceased's estate plan. If the beneficiary does not have a will or trust, the assets will be distributed based on state intestacy laws. These laws determine who receives the assets in a hierarchical order, such as spouse, children, parents, and siblings.