Beneficiary Designation

[Guest MC2]

Can an employee whose marital status is single designate his estate as his beneficiary for the purposes of payment of any lump sum death benefit that his beneficiary may be entitled to under the provisions of the pension plan?

Thanks!

[Effen]

Generally, most documents I work with state that if there is no beneficiary designation or if the beneficiaries pre-decease the participant, any death benefits are paid to the estate.

Also, if the death benefit is an annuity (like the remainder of a period certain), it may cause problems for the estate; how could the estate close if it will be receiving annuity payments for the next x years?

I'm not sure why you would want to designate the estate as the beneficiary. Are you asking about pre-retirement or post-retirement death benefits?

[Guest MC2]

Yes, I am asking about pre and post retirement death benefits.

[Effen]

But why do they want to do this? What are they trying to accomplish?

[Bird]

They might have a trust set up as part of the will and want the payouts to be handled as per the trust provisions. It's not a great idea for the reasons mentioned above.

But yes, they can do it.

[david rigby]

But be careful. Effen is correct that many documents define a beneficiary if there is no affirmative election, but sometimes that definition will include a priority of others (spouse, children, parents, siblings, etc.) before using "estate". Thus, don't rely on the default.

[SoCalActuary]

Does this seem like a topic for the distributions or the estate planning forum?

[AndyH]

SoCal

I am of the opinion that you should go to those boards and stay there.

Your criticizing of questions and people is getting out of hand. These questions are entirely appropriate if a db plan is involved since the death benefit rules are very different.