Beneficiary is the legal term used to describe where you want your money or property to go when you die (though lots of living people share their wealth with beneficiaries through trusts.) Wills, IRAs and life insurance policies allow you to name beneficiaries, which is an incredibly important thing to do. If you do, your money and property will seamlessly go directly to your heir or a favored cause, with a minimum taken off the top in the process.
If you don’t name a beneficiary, your estate will end up in what’s called probate — the legal process of deciding who gets your stuff. Not only might your money and property end up where you didn’t intend, but it’s also expensive. In addition to hefty court fees, your estate will likely have to hire an attorney and, if you left property, an appraiser (who will hopefully discover a lost Rembrandt underneath that dogs-playing-poker painting hanging in your rec room.)
Life is unpredictable, so even if you’re young, you shouldn’t wait; one of the first things on any newlywed’s to-do list is to add a beneficiary to all your existing retirement accounts.