Tag Archives: entities

NYSLRS Basics: Special Beneficiary Designations

What makes special beneficiary designations so special?

As a NYSLRS member, it’s important for you to name beneficiaries. Your beneficiaries may be eligible to receive a death benefit upon your death.

You can choose anyone you wish to receive your death benefit; it does not have to be a family member. In fact, it doesn’t even have to be a person. You can name your estate, a charity or a trust.

But before we talk more about these special beneficiary designations, let’s quickly go over the two main types of beneficiaries. These are important to know as some special designations may affect who you can designate.

About Primary and Contingent Beneficiaries

A primary beneficiary is someone you choose to receive your benefit if you die. A contingent beneficiary would only receive the benefit if the primary beneficiary dies before you. If a beneficiary dies before you, you should update your beneficiary information to ensure that your benefit is distributed according to your wishes.

As a reminder, Retirement Online is the convenient and secure way to view and update your beneficiaries. If you don’t already have an online account, you can learn more on our website.

About Special Beneficiary Designations

Here are some examples of special beneficiary designations and the rules for each one:

special beneficiary designations

Estates

You may name your estate as the primary or contingent beneficiary of your death benefit. If you name your estate as your primary beneficiary, you cannot name a contingent. If a benefit is payable, the executor of your estate will distribute it according to the terms of your will.

Trusts

If you have executed a trust agreement or provided for a trust in your will, your trust can be your primary or contingent beneficiary. To name a trust, sign in to Retirement Online or use our Trust with Contingent Beneficiaries form (RS5127-T). We’ll need a copy of your trust document, which you can mail to NYSLRS or upload using Retirement Online.

With this type of designation, the trust is the beneficiary, not the individuals who will receive the trust. If you revoke the trust or it expires, you will want to make new beneficiary designations as soon as possible to ensure benefits are paid according to your wishes.

You should talk to an attorney if you’d like more information on trust agreements.

Entities

You may name any charitable, civic, religious, educational or health-related organization as a primary or contingent beneficiary. Be sure to include the organization’s full name and address in your designation.

Minor Children

If your beneficiary is under age 18 at the time of your death, your benefit will be paid to the child’s court-appointed guardian. You may instead choose a custodian to receive the benefit on the child’s behalf under the Uniform Transfers to Minors Act (UTMA). Custodians can be designated in Retirement Online. Before making this type of designation, please contact us for more information.

More Information

Please note that some of these beneficiary designations will be subject to a NYSLRS legal review.

For more information, please read our publication “Why Should I Designate a Beneficiary?” You can find your current NYSLRS beneficiaries listed in Retirement Online, or in your most recent Member Annual Statement.

Update Your Beneficiaries

It’s easy and important

How long has it been since you thought about your NYSLRS beneficiaries? A year, two years, five? Did you get married since then? Get divorced? Have a child?

When you die, your NYSLRS death benefit will be paid to the last beneficiaries you designated. That’s the law. That’s why it’s so important that you check your NYSLRS beneficiary designations periodically.

Luckily, it’s easier to do than ever.

The new Retirement Online is a convenient way to review account details and conduct business with NYSLRS in real time. Now, instead of sending a form through the mail, you can simply sign in to Retirement Online to view your designations and submit changes instantly.

Register and sign in to Retirement Online today to update your beneficiaries and access a variety of other time-saving features.

Types of Beneficiaries

You can designate primary and contingent beneficiaries:

  • A primary beneficiary receives your death benefit. If you name more than one primary beneficiary, they will split the benefit equally.
  • A contingent beneficiary receives a benefit only if all your primary beneficiaries are deceased when you die.

Special Benefit Designations for Beneficiaries

Special Beneficiary Designations

Your beneficiary doesn’t have to be a person:

  • When you die, your estate is all the money and property you owned. If you make your estate a beneficiary, the executor of your estate will distribute your benefit according to your will. If you outlive both your primary and contingent beneficiaries, your benefit will go to your estate by default.
  • A trust is a legal arrangement giving a person you choose legal control over property — such as a death benefit. The trust itself would be your NYSLRS beneficiary, not the individuals for whom you established the trust. (You may want to speak with your attorney if you’re thinking about making your trust a beneficiary.)
  • You can name a charitable, civic, religious, educational or other kind of organization as a beneficiary too.

For more information about beneficiaries, check out our booklet, Why Should I Designate a Beneficiary? (VO1706).