Designate your spouse?
February 14, 2013
Read our three-part Surprising beneficiary designations series.
Too often we see a member designate his or her spouse as survivor beneficiary.
There are two problems with this scenario: under Ontario law, your spouse is automatically designated as your Teachers' survivor beneficiary; but more important, sometimes marriages sour, designations don't get updated and tragedy strikes. What started out as a golden intention to care for an important person in your life can turn into leaving someone you no longer have a relationship with what is most likely your most valuable financial asset. If you die after a lengthy career, and before you are able to retire, this survivor benefit can be close to $1 million.
Sign in to iAccessWeb, our secure member website, to review and update your beneficiary designation.
Here's an example, based on the types of scenarios we see.
Cindy married Bill shortly after she started teaching. She designated him as the beneficiary of her Teachers' pension. Within their first year of marriage, Cindy and Bill welcomed their only child, Sue.
Twenty years later, Cindy decided to leave Bill. The marriage did not end on good terms, and the pair very quickly filed for, and received, a divorce.
During the divorce proceedings, and the years that followed, Cindy updated her will, but forgot to review and update her Teachers' beneficiary designation.
Cindy eventually found new love in a co-worker, Rick, and moved in with him. Two years after moving in together, she was killed in a car accident. Because Cindy and Rick lived together for less than 3 years, and were not married, he was not considered her eligible spouse. Her daughter, Sue, was over the age of 18, no longer in school and no longer considered a dependent child, so she was ineligible to receive Cindy's survivor benefit.
Cindy had not spoken with Bill since their divorce was finalized, but because he was still listed as beneficiary, he was entitled to the survivor benefit, worth just under $1 million.