Why the Beneficiary Designation Is So Important

Talking about what happens after we die is a tough conversation to have. The impact our death has on our loved ones can be hard to think about or plan for, but the facts are staggering: only 62% of employees nationwide have a designated beneficiary. 

All county benefit-eligible employees have a county-paid life insurance benefit where you can designate beneficiaries. In addition, you may already be familiar with beneficiary designations through other accounts - such as retirement (PERS), deferred compensation (Voya), or through the county’s or your own life insurance policy.  Let's take a look at why beneficiary designations are so important to your estate plan — and to your loved ones.

What is a beneficiary?
Individual Signing Documentation Paper
Individual Signing Documentation Paper

Simply, a beneficiary is a recipient of assets. To put it in more legal terms, a beneficiary is a person or entity that is named on a financial instrument or account to receive the property or asset at the death of the owner.

When you think about beneficiary designations, your life insurance policy likely crosses your mind, but your final paycheck, retirement, checking, savings, and investment accounts can also include beneficiaries in the form of either TOD (Transfer on Death) or POD (Payable on Death) designations. In some states, there is even a formal "Transfer on Death Deed" format for real estate that you can utilize for estate planning purposes.

Beneficiaries do not have to be family members. They can be neighbors, siblings, partners, close friends - even institutions or charities. Assets can also be split among multiple people and entities, furthering the way you customize your estate plan.

Official beneficiary designations supersede your will.

One of the most confusing concepts is the relationship between your beneficiary designations and your will. Assigning beneficiary designations is separate from leaving people assets in your will.

Beneficiary designations take precedence over what you’ve specified in your will or trust. For example, if you leave everything to your children in your will, but your ex-spouse is listed as the beneficiary on your accounts, your estate will go to your ex-spouse, not your children. Even if your will was updated after the divorce to name your children, the beneficiary designation of each asset will dictate where that asset goes at your death.

Beneficiary designations should be made in coordination with other estate planning, such as designations in a will, and should be selected with careful intention. Including beneficiaries on an account is just like a contractual arrangement. Therefore, it is vital to review them often to make sure that your true intentions are in place and that your valuable assets end up where you intend. 

While designating beneficiaries is a critical part of estate planning, estate planning encompasses much more, such as choosing an executor, appointing a guardian or trust for minor children, creating a living will (or designating a healthcare proxy), and planning for post-death taxes. You can find more information on estate planning through Voya. In addition, the county’s EAP provider (ComPsych), offers some legal resources to help you get started. 

What happens if I pass away without designating a beneficiary on my accounts? 


If you pass away, the funds remaining in your account (if any) may continue to be used by your surviving legal spouse and qualified dependents to reimburse their eligible medical care expenses and premiums. Surviving spouses and dependents receive the same tax advantages as participants. In the unlikely event that you pass away with an unused account balance and have no eligible survivors, the executor of your estate can spend down your account by filing claims for any unreimbursed medical care expenses you may have incurred prior to your death. Remaining funds (if any) after all final claims have been reimbursed would then be forfeited and re-contributed per the terms of the Plan document or otherwise applied as directed by your employer. IRS Revenue Ruling 2006-36 does not permit the payment of benefits to non-dependent heirs. 

Life Insurance

You can designate one, two, or more people and/or a trust, charity or other organization, as beneficiary of your life insurance. If you don’t name a beneficiary, or if no beneficiaries survive you, the life insurance benefit will go to your survivors or your estate in this order: your spouse or domestic partner, your children, your parents, your brothers and sisters, or your estate. Use this Quick Reference Guide to add or change your life insurance beneficiaries in Workday. If you have both basic and supplemental life insurance, make sure that you designate beneficiaries for each. You are always the beneficiary for Spouse/Domestic Partner supplemental life insurance. 

If you need assistance adding a beneficiary to your basic or supplemental insurance, you can contact the Benefits Office at employee.benefits@multco.us or 503-988-3477.


  • OPSRP Pension: No need to designate a beneficiary because this is already set for you by law. Only eligible beneficiaries are a spouse, a same-sex registered domestic partner, or a former spouse or a minor child as directed by court order. You cannot designate another person.
  • Tier 1 or 2 Pension: Without beneficiary designation, benefits will be paid to your estate if probated. If the estate is not probated, PERS will pay benefits to a small estate affidavit claiming successor, as specified in statute.
  • OPSRP, Tier 1 or 2 IAP account balance: Without beneficiary designation, PERS will pay your IAP balance to your survivors or estate in this order: your surviving spouse or other person who is constitutionally required to be treated in the same manner as a spouse, your surviving children in equal shares and your estate.
  • Tier 1 or 2 Member account balance: (member contributions were placed in this account before IAP accounts were established): Same as Pension

PERS accounts and beneficiaries are handled through the state. See the forms below to designate beneficiaries. If you need assistance, contact PERS directly at (888) 320-7377. 

Deferred Compensation Plan 457(b) thru VOYA

Designating a beneficiary for your Multnomah County Deferred Compensation account and keeping it updated is critical so that the savings you’ve accumulated are passed along to the right people. Without a beneficiary, your account could go to probate - delaying payment to your loved ones. Your 457(b) account is handled through VOYA.  Please login or register your account online to designate your beneficiary and protect the people who matter most to you.

How To Designate Your Beneficiaries thru VOYA

  1. Visit Multnomah.beready2retire.com and log in or register your account.
  2. Select your name in the top right hand corner of your retirement account web page and choose "Personal Information" to update your beneficiary.
  3. If beneficiaries are already listed, no action is needed unless you want to make changes.

If you need assistance, contact deferred.comp@multco.us.