A contingent beneficiary is a beneficiary who will only be able to obtain the benefits in the event the original beneficiaries pass away or otherwise do not qualify under the requirements established by the original trust or policy.
One circumstance in which a contingent beneficiary may be awarded the assets are if the original beneficiary, sometimes also known as the primary beneficiary, is unable to fulfill the restrictions placed upon their ability to obtain the full benefits. The claim of a primary beneficiary is nearly always granted supremacy over a claim filed by a contingent beneficiary.
Aside from circumstances under which the primary beneficiary forfeits their rights to the benefits due to being unable or unwilling to adhere to the stipulations associated with the benefits, the only time a contingent beneficiary will be given precedence is if improper action or the use of undue influence on the part of the primary beneficiary upon the person who created or administered the benefits can be proven in a court of law.
However, these claims are very difficult for a contingent beneficiary to prove their claims in a conclusive manner. A contingent beneficiary cannot be appointed for every set of benefits, such as retirement policies which fall out of effect in the event the primary beneficiaries die.