Surprising beneficiary designations
September 25, 2012
Part One of a three-part series (read Part Two and Part Three) exploring scenarios based on the types of circumstances we see that could leave family and friends stunned.
Designating a beneficiary is important. Doing so allows you to offer financial security to those that are important to you in the event of your untimely death, and it helps your estate avoid taxes and delay. Reviewing that designation over the years carries just as much weight.
To update your beneficiary designation, sign in to your Ontario Teachers' account.
For members that die before retirement without an eligible spouse or dependent children, it is not uncommon for beneficiary death benefits to reach $1 million.
We've seen an increase in members ensuring they have a beneficiary designated. However, we've also seen some examples that, in the unfortunate event of members dying before retirement, family and friends were left shocked and confused by the designation.
We can't ever know for certain members' respective intentions, but a common factor exists in each example: the designations were done years prior, with no update in the subsequent years.
Jim passed away before retirement, unmarried and with no children. His family took charge of tying up the loose ends of his estate. He had a bit of money in his bank account to pay off some debt, and his family pooled funds to cover the cost of a funeral.
When one of Jim's brothers contacted Teachers' to inquire about a survivor benefit, he was surprised to hear that Jim had designated a young family member. Jim had a big family, all of whom he was on good terms with, and no one could understand why this one child had been specified.
The benefit was approximately $800,000.