Litigation

Annuitant Dies But Beneficiary Is Dead... What Happens Now?

By John Darer

"What happens if beneficiary of death benefit on a structured settlement annuity is dead?" came the question. The question highlights why settlement planners, attorneys and plaintiffs must give some serious thought to the designation of beneficiary of structured settlement payments that form part of the recovery of damages.

The question suggests that the named beneficiary was an individual (as opposed to a trust,estate or other entity). In many settlement agreenments the contingency is covered by stating that if the named beneficiary is not alive at the time of the annuitant's death, then the remaining guaranteed payments go to the estate of the annuitant. In answer to the simple question, one could make that assumption here.

Structured setlement brokers, settlement planners and attorneys for plaintiffs should make it a practice to carefully check the beneficiary designation, as part of their review of settlement documents, to be sure it meets the wishes and/or needs of their client. This designation should be reviewed periodically by the annuitant with their advisors, as changes may be needed to reflect changing life circumstances (e.g. marriage, remarriage, divorce, birth or adoption of additional children, birth of grandchildren, death of beneficaries, changes in feelings about inheritances, or special needs).

Note that in some circumstances the beneficiary may not be able to be changed.

Full post as published by Structured Settlements 4Real on May 04, 2008 (boomark / email).