How to Designate Your Beneficiaries

If I had to estimate, I’d say one out of every 25 participants I talk to after a meeting will mention in conversation their recent engagement, marriage or new baby. My reply is always very similar: “Congratulations! Here’s information on how to update the beneficiaries for your retirement plan”.

Not exactly the inscription you’d find in a greeting card, but maybe it should be.

Even if you haven’t had a recent lifestyle change, I’d like to ask you: Are your beneficiaries up to date? If you’re the slightest bit unsure, I want you to put this on your to-do list and complete it today.

If you think that’s a bit of an overreaction, ask any financial or human resources professional about beneficiaries and they can share a horror story of someone that passed away with no beneficiaries or with outdated beneficiaries.

Or, turn on an entertainment news show – there’s always a recently deceased celebrity that suddenly has family coming out of the woodwork to claim their piece of the estate. Your retirement account might not be as large as a celebrity’s, but you worked just as hard to build it up and therefore deserve for it to be distributed as desired.

Keep in mind that who you designate as your beneficiary on your retirement plan assets takes precedence over your will or trust. In fact, the designated beneficiaries in your will or trust do not automatically carry over to your 401(k), 403(b) or IRA. Accounts without beneficiaries listed are subject to probate, which can be expensive and time-consuming and may also put the assets into the hands of someone that you would not have selected.

So without further ado, here’s some information to assist you in designating your beneficiaries for your BPAS account.

How to Designate Beneficiaries: 

Depending on your plan’s set-up, you may be able to designate beneficiaries online or via a paper form.  Check with your employer if you are unsure.

To Designate a Beneficiary Online:

1. Log in to your account at bpas.com.
2. Select the Designate Beneficiary option from the Personal Information tab along the top menu bar.
3. Select your marital status.
4. Enter your beneficiary designation(s) into the on-screen fillable fields.
5. Click Submit to confirm your designation(s).

To Designate a Beneficiary Through Your Employer:

1. Log in to your account at bpas.com.
2. Select the Resource Center option from the Resource Center tab along the top menu bar.
3. Scroll to Administrative Forms and select the Beneficiary Form.
4. Complete the form and return a copy to your employer.

Some Considerations When Designating Beneficiaries:

1. You have the capability to designate two types of beneficiaries: Primary and Contingent.

Primary beneficiary(ies): Should you pass away, the person or persons listed as primary beneficiary would inherit your account.

Contingent beneficiary(ies): If the primary beneficiary(ies) is also deceased, the contingent beneficiary(ies) would inherit the account. Also known as secondary beneficiaries.

2. If you are married, federal law automatically defaults your spouse as the 100% primary beneficiary of your retirement plan, when you do not have beneficiaries on file. Even if you plan to designate your spouse as the 100% primary beneficiary, completing your beneficiary designations anyway can help avoid any potential issues.
3. If you would like to designate someone in addition to your spouse or besides your spouse as the primary beneficiary, your spouse will need to waive their rights to the account. This can be done directly on the beneficiary documents with your spouse having their signature witnessed by a notary public.
4. Be sure to review with your estate attorney. If you have outside accounts, life insurance, etc., you should consider reviewing and updating beneficiaries accordingly.

With spring being the time where we see an uptick in weddings and college graduates entering the workforce, it’s essential that they complete or update their beneficiaries accordingly.

You might not want to be the relative to mention this to the newlywed at the reception, but it might not hurt to have a brief conversation once the festivities have ended.