A beneficiary is a person that you nominate to receive all or a percentage of the money from your policies, certain investments and retirement funds such as your retirement annuity and preservation fund when you pass away. You can nominate one person or more than one, and choose the percentage you want every beneficiary to get.
The Pension Funds Act says that the trustees of a retirement fund must decide how the money will be paid out when you die, and who must receive it. The trustees have to identify the dependants and nominees and then decide what will be the most fair and reasonable way to divide the money among them.
A dependant is any person that was legally or financially dependent on you at the time of your death. There are also dependants that you would have had to look after in future, such as an unborn child or elderly parent. Dependants get preference above nominees, but the trustees will use your list of beneficiaries as an invaluable guide to determine both dependants and beneficiaries.
Can you remember who you listed as the beneficiary for every financial product that you own?
Our life circumstances continuously change: through marriage and divorce, the addition or loss of dependants, for example a baby is born or you lose a parent, or the number of people who are financially dependent on you.
Keep tabs by keeping a list of the beneficiaries that you have nominated for different products, as well as the percentage that you allocated to each beneficiary. Also contact the different institutions and update your list of beneficiaries if your circumstances change. It is good to do this yearly so that you do not forget.