One of the reasons you work so hard is so that you can provide for your loved ones. But what if you pass away suddenly? What will happen to your retirement benefits?
When you first began working for the federal government, you filled out beneficiary forms to answer that question. On the forms, you specified a beneficiary who will receive any after-death benefits based upon your employment. If your situation changes at any point in time, you should fill out a new beneficiary form with your personnel office. In fact, it is recommended that everyone review this information every two to three years, to make sure their beneficiary forms still reflect their wishes.
You can designate anyone to receive your Federal Employees Group Life Insurance payout, or the proceeds from your Thrift Savings Account. But if you want to leave a survivor annuity to an heir, the rules are much more strict.
In most cases, only a lawfully wedded spouse may receive the proceeds of a survivor annuity. However, under certain court orders, a former spouse may also receive this payment. There is one exception to the spousal rule in regard to survivor annuities: If you are involved in a common law relationship in a state that recognizes such as a marriage, or if you began the relationship in such a state and subsequently moved to another state, then your common-law spouse may receive payment from a survivor annuity.
A rarely-used provision in the law allows you to provide a survivor annuity to someone who has an “insurable interest” in you. However, the process for applying for this status can be complicated, and might require special expertise to help you process the application.
If you’re making decisions regarding estate planning, in most cases your non-spouse dependents are most easily served by providing them with life insurance or the proceeds from your Thrift Savings Account. However, this is an issue to discuss with your financial planner or estate planning attorney. If you call us and schedule an appointment, we can explain your federal employee benefits with regard to estate planning.
