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Medallion Financial Group

Beneficiary Review

Back in 2012, Forbes online published an article titled “ Dead man’s outdated beneficiary documents give one million to ex-wife.” Can you imagine?

This guy would probably be turning in his grave if he realized that he accidentally gave one million dollars to the wrong person!

The story goes on to explain how this man went to school, built a successful company, had three kids, got divorced and then remarried, but the problem was that he never updated his beneficiary documents with his Transamerica life insurance policy when he got remarried.

He ended up passing away and his ex-wife got a check for a million dollars because he never updated his beneficiary documents.

The current wife tried to attest it; she argued that she was the current wife, and that there was a mistake and order of precedence, but the law is pretty clear as far as benefices go, and the final decision was that the named beneficiary is the person that gets the check regardless of intentions.

Even if she could prove he really wanted her to get the check, it didn’t matter.

What does the Law Say?

In some cases, naming a beneficiary can be a good thing because having the right beneficiary named ensures that the right person gets the check and it avoids probate.

Named beneficiaries can make the passing of assets a very smooth process, but the point is that you want to make sure that you are annually reviewing your documents from your FEGLI, TSP3, IRA’s, life insurances, and annuities and that no life changes have changed your beneficiaries.

This is only one story, but there are plenty more like it, and it’s not always an ex-wife. So even if you’re not married or divorce isn’t in your future, that doesn’t mean this won’t apply to you.

At the end of the day, there’s somebody that you will want the check to go to, and that somebody might change between now and when you die. You don’t want it to default to the order of precedence if the order of precedence isn’t what you want.

The moral of the story: make sure you are updating your beneficiaries often so that in the unfortunate event of your passing, the right person will get the check. It’s really as simple as that.

Make sure you go through your FEGLI, TSP3, IRA’s, life insurances, and annuities. Check and review ALL of your documents and make sure you have copies of them in a safe place.

It will make the reviewing process a lot easier for you.

  • SF 3102 (FERS)
  • SF 2808 (CSRS)
  • TSP-3 (TSP)
  • SF 2823 (FEGLI)
  • SF 1152 (Unpaid Compensation at Death)

See If You Are Ready To Retire!

For over 30 years, federal employee retirement planning has been a key focus of Medallion Financial Group. We recognize that FERS retirement benefits have extra layers of complexity, such as the Thrift Savings Plan (TSP), 401K, Pension plan, FEGLI and more. It’s easy to get lost in a sea of bad advice when so few people understand the basics. We help with the basics and beyond to enable our clients to get the education and advice they need to retire with confidence.

Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.

We strive to exceed client’s expectations – because we have high expectations of ourselves.

post icon in Retirement by Medallion Group Aug 4, 2014