by John Darer® CLU ChFC MSSC RSP CLTC
You can name and change beneficiaries if you are receiving structured settlement payments. You can name who you like, even your favorite charity. You can also name contingent beneficiaries and /or joint-beneficiaries.
The beneficiary receives any remaining certain payments and guaranteed lump sum payments when such payments come due.
Life contingent payments are only made if living. For example, if you settle your case in 2015 with a structured settlement that is due to pay you $5,000 per month, starting June 1, 2015 for the rest of your life with 35 years certain and you die May 2, 2025, your beneficiary will receive the $5,000 per month from June 1, 2025 for the next 25 years after which payments will stop.
What if you don't have a beneficiary or can't think of a beneficiary?
If you don't have specific person you want to leave money to, you could fund a scholarship with any remaining payments.
Naming a beneficiary will generally result in a faster process for your loved ones
It's a claims process not a probate process. In most cases, the beneficiary simply reports the claim, fills out a claim form, attaches a copy of the death certificate and provides whatever else the life insurance company that issue may require.
If you don't name a beneficiary, or the beneficiary is not living at the time of your death, payments go to your estate, where they will be distributed when due in accordance with your will. If you have no will then the laws of intestacy apply. Naming a beneficiary is better for you because your wishes will be complied with. For those you leave behind, there is no need to go through probate in order to have payments released.
From time to time it is important to review all of your beneficiary designations, particularly after any life changes, to make sure that they still meet your wishes
If there is an irrevocable beneficiary designation, you cannot change the beneficiary.
When is there no beneficiary on a structured settlement annuity?
If the annuity is a life only annuity, temporary life annuity, or you've had a certain and life annuity for some time and annuity is currently beyond the certain period, then the payments stop upon the death of the annuitant.
This also applies if the annuitant has previously sold all period certain and/or certain lump sum structured settlement payment rights.