LIFE RIDERS, PROVISIONS, OPTIONS · 5 MIN READ

Beneficiary Designations and Succession Rules

Beneficiary law determines who actually receives the death benefit. Primary beneficiaries take first; contingent (secondary) beneficiaries take only if no primary survives. A revocable beneficiary can be changed by the owner at any time; an irrevocable beneficiary has a vested interest, so the owner needs that beneficiary's written consent to change the designation, take policy loans against their interest, or otherwise impair their rights. Class designations such as all my surviving children avoid naming individuals but raise division questions. Per capita division gives each living class member an equal share at the takers' level, ignoring family branches. Per stirpes (by the roots) divides at the level of the named beneficiaries and passes a deceased beneficiary's share down to that person's own descendants — so if one of three children predeceases leaving two children, those grandchildren split their parent's one-third while the surviving children keep their thirds. Simultaneous and near-simultaneous deaths are governed by survival rules. Under the Uniform Simultaneous Death Act framework and the Uniform Probate Code's 120-hour rule, a beneficiary who fails to survive the insured by at least 120 hours (5 days) is deemed to have predeceased, so proceeds bypass the beneficiary's estate and flow to the contingent beneficiary. Policies may adopt longer common-disaster windows. A slayer rule bars a beneficiary who feloniously kills the insured from taking the proceeds. A beneficiary who does not want the proceeds can execute a qualified disclaimer: an irrevocable written refusal, delivered within 9 months, with no prior acceptance of benefits and no direction over where the property goes — treating the disclaimant as having predeceased so the proceeds pass to the next taker without gift tax. Federal law overrides state law for employer plans. Under ERISA preemption, plan administrators pay the beneficiary named on the plan's most recent designation form — even an ex-spouse whose divorce decree waived benefits — leaving any recovery to later state-court action against the recipient. And under the Retirement Equity Act, a married participant in a qualified plan must obtain the spouse's written consent, notarized or witnessed by a plan representative, to name anyone other than the spouse as primary beneficiary.