When a participant dies, the balance of his or her 403(b) or 457 plan is paid to a beneficiary or beneficiaries on file with his or her vendor. A participant can name a family trust (or another legal person or persons) as his or her beneficiary with important caveats and requirements. Under federal law, a married person must make his or her spouse the beneficiary, unless the spouse gives up that right. If you designate a trust as a beneficiary, you’ll need to provide the trust’s name, the date it was created, the tax identification number of the trust (if available), and the name and address of the trustee.
You should review your beneficiary designations annually and update them as necessary through your 403(b) or 457 plan vendor(s). To learn more, read Choosing a Beneficiary at CTAinvest.org.