Opinion ID: 3208853
Heading Depth: 3
Heading Rank: 2

Heading: Contingent Beneficiaries

Text: At the time a will is drafted, the testator cannot know or at least could not be certain whether any particular contingency will be removed such that a contingent beneficiary will in fact take. Thorsen argues, therefore, that a contingent beneficiary by definition cannot be a “definitely intended beneficiary.” 15 Yet one of the most common scenarios in which parents enter into their first set of testamentary instruments shows this to be contrary to reason. Consider the couple who retains an attorney to draft reciprocal wills at the birth of their child. They will likely name each other as the primary beneficiaries, desiring that if something were to happen to only one of them, the other would benefit from the will. The child is a contingent beneficiary, sometimes through a trust if a minor and in his or her own name as an adult. An overriding purpose in entering into the contract with the attorney to draft such a will at this time is generally to account for the possibility that both parents might perish, perhaps in a common accident, and to provide for the child’s long-term care. Although the surviving spouse remains the primary beneficiary of the will, and the child takes only as a contingent beneficiary, this does not alter the fact that the child is a “clearly and definitely intended beneficiary” of the contract to draft the will. Contrary to Thorsen’s claims, the viability of a third-party contract claim in this context does not depend on identifying, or being able to identify, the specific party being benefitted when the contract is made. Palmetto Fire Ins. Co. v. Conn, 272 U.S. 295, 304-05 (1926); see also 13 Williston on Contracts § 37:29, at 215 (Richard A. Lord ed., 4th ed. 1990 & 2013 rev.) (citing many sources). Contingent beneficiaries exist to accommodate changing circumstance, particularly age, and to direct the progression of beneficiaries without the constant need to revisit the instrument as time and eventuality goes by. Thus, the fact that beneficiaries do not take first does not mean that they are not “clearly and definitely intended beneficiar[ies]” under the contract, but rather that they were not intended as the first takers given the circumstances at the time the will was drafted; yet, the will might still have been drafted, perhaps even primarily as in the example above, for their benefit. See, e.g., Ogle v. Fuiten, 466 N.E.2d 224, 226 (Ill. 1984) (allowing a claim from niece and nephew contingent beneficiaries to go forward on a breach of 16 contract/third-party beneficiary theory); Passell v. Watts, 794 So.2d 651, 652 (Fl. Dist. Ct. App. 2001) (plaintiffs were contingent, residuary beneficiaries). Whether a contingent beneficiary in a will is a third-party beneficiary of the contract to draft the will is a fact-intensive inquiry.