We live in a forms dominated society. It often seems like nothing will go right unless we’ve filled out the right ones. Case in point. Suppose you were cruising along through life as a federal employee or retiree and you suddenly died. What would happen to your retirement, your life insurance, and your Thrift Savings account? No sweat, you say. I’ve provided for that in my will. Wrong! Your will controls none of these things. In most cases what will control them is the standard order of precedence unless you have filled out the proper designation of beneficiary forms.
Because this is the government, each one of these “accounts” has its own form. For the retirement system, it’s Standard Form 2808 (CSRS) or 3102 (FERS). For the Federal Employees’ Group Life Insurance it’s Standard Form 2823. And for the Thrift Savings Plan it’s TSP-3. The Standard Forms can be downloaded from the OPM web site at www.opm.gov/forms/html/sf.asp. For the TSP form, go to www.tsp.gov/forms/index-forms.html.
Just remember: having filled out these forms once doesn’t end things for most of us. Circumstances change, for example, with marriage, the birth of a child, divorce, the death of loved ones, etc. If they do, you may have to resubmit those forms. Even then, there may be limits on your ability to completely control where your benefits go. For example, a court-order may assign some or all of your benefits to a former spouse.
Now, let’s suppose that you are a carefree person who has no outstanding court orders and who has a constitutional objection to filling out forms. If you don’t designate a beneficiary, your benefits will be distributed according to the standard order of precedence:
◦ to your widow or widower;
◦ if none of the above, to your child or children, with the share of any deceased child distributed among the descendents of that child;
◦ if none of the above, to your parents in equal shares or the entire amount to your surviving parent;
◦ if none of the above, to the executor or administrator of your estate; and
◦ if none of the above, to your next of kin under the laws of the estate where you were living when you died.
Lest you think that each category of benefit flows effortlessly according to your designation of beneficiary or by tumbling down the order of precedence, I need to point out that what is generally true for life insurance and the Thrift Saving Plan isn’t true for the retirement system. Barring a court order, the only person who can receive a survivor annuity is your spouse. However, if you weren’t married when you died, your contributions to the retirement system would be distributed either according to your designation of beneficiary or under the standard order of precedence. The same would be true if you were retired, unmarried, and hadn’t received all your contributions to the retirement system in annuity payments.
