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Naming beneficiaries protects your loved ones

Posted on March 8, 2023

Do you know who will inherit your assets after you’re gone? Choosing beneficiaries for all your financial accounts ensures your funds are distributed according to your wishes and provides clear instructions for your estate. About a third of DRS customers do not have a beneficiary on file. It’s easy to view and update your beneficiary information.

Accounts that are jointly owned, have a named beneficiary, or are ‘payable upon death’ often supersede any will. This important step may allow your loved ones to avoid a costly probate process—when a court distributes your assets. Probate costs in Washington State start at $350, and the process can take six months or more. Keep in mind that not all your assets will pass through your will.

Also, it’s important to understand the difference between a beneficiary and a survivor. You can elect for a survivor to receive a monthly benefit for life. If you choose to do this, it will reduce your monthly payment amount. Get to know the survivor benefit options you’ll have in retirement, including more information about the circumstances where a survivor could be changed.

A beneficiary receives a single, lump-sum payment of any contributions remaining in your account. This only happens if there is no survivor and there are funds left in your account when you pass. The beneficiary and survivor can be the same person, or you can choose different people. See a live or recorded benefit options webinar for more information.

Beneficiary vs Survivor description image — Beneficiary: If you die before retirement, your beneficiary will receive a lump sum of any remaining contributions from your account. Survivor: When you retire, you can choose a survivor. After your death, this person will receive monthly retirement income for the rest of their lives.

Beneficiaries will receive your assets after your death, so it’s important to name a beneficiary for all financial accounts. You can name more than one beneficiary per account or add a contingent beneficiary who would inherit if the primary beneficiary passes before you do. Life events such as marriage, divorce and children may require a change in beneficiary.

Reach out to your financial institutions to make sure you understand the rules and restrictions for designating and updating your beneficiary, and review accounts yearly to make sure the information is up to date. Also, keep in mind that if you name a child or someone with a disability there may be financial, personal and legal considerations. It’s a good idea to check with a tax advisor or financial professional.