Beneficiary forms: what overrides your will

Why the will loses

A will directs your estate. FEGLI and the TSP are not part of your estate; they are contracts that pay whoever is named on file, and that designation is honoured regardless of what any will, divorce decree or state law says.

Every year, federal survivors discover this the hard way. The money goes where the paperwork points, and by then nothing can be done about it.

One form per benefit

There is no single federal beneficiary form. Each benefit has its own, and completing one does nothing for the others.

What happens with no form

Nothing is lost if you never file one; a statutory order of precedence applies instead. For both FEGLI and the TSP it runs:

• Your widow or widower.
• If none, your children equally, with a deceased child's share passing to their descendants.
• If none, your parents equally, or the surviving parent.
• If none, the executor or administrator of your estate.
• If none, your next of kin under the law of the state where you lived.

For a simple family that default is often exactly right, and filing nothing is a legitimate choice. It stops being right the moment your family is blended, you have divorced, you want to include someone outside that list, or you want shares split unevenly.

The mistake that keeps recurring

Someone marries, names their spouse, divorces years later, remarries, never updates the forms, and dies. The first spouse receives everything.

Divorce does not revoke a federal beneficiary designation. State laws that automatically revoke on divorce do not reach these programmes, and a divorce decree saying otherwise does not change what is on file. Only a new designation does.

A court order can direct a former spouse's entitlement in some circumstances, which is a separate matter handled through OPM. It is not a substitute for updating the form.

Contingent beneficiaries and minors

• Name a contingent. If your primary dies before you and there is no contingent, the default order takes over and may not match your wishes.
• Think twice about naming a minor. A child cannot receive a large payment directly, and the money usually ends up under a court-supervised arrangement. A trust, or an adult custodian, is the usual answer.
• Use percentages, not amounts. Balances change; shares do not.
• Full legal names and dates of birth. Vague designations are the other way these get disputed.

How much should be going to those people in the first place is a separate question, and the arithmetic is here.

Checking yours this week

• Log into TSP My Account and look at the designation on screen. It takes two minutes.
• Ask your HR office for copies of what is on file for FEGLI and for unpaid pay and leave.
• Check your VA designations separately if you carry VGLI or VALife.
• Keep copies with your own records, and note the date filed.
• Review after any marriage, divorce, birth, adoption or death in the family, and otherwise every few years.

Common questions