by John Darer CLU ChFC MSSC CeFT RSP CLTC
What happens if beneficiary of a structured settlement annuity dies before the annuitant?
Settlement planners, attorneys, and plaintiffs should give careful consideration to the designation of beneficiaries for structured settlement payments that are part of damage recovery. The inclusion of contingent beneficiaries should also be evaluated.
The question implies that the named beneficiary is an individual rather than a trust, estate, or other entity. In many settlement agreements, this contingency is addressed by stipulating that if the named beneficiary is not living at the time of the annuitant’s death, the remaining guaranteed payments will be directed to the annuitant’s estate. Therefore, in response to the straightforward question, one could reasonably make that assumption here.
- Structured settlement 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.
The structured settlement beneficiary designation should be reviewed periodically by the annuitant, with their advisors, as changes may be needed to reflect changing life circumstances
- Marriage
- Remarriage
- Divorce
- Birth of children
- Adoption of children or grandchildren
- Death of Beneficiary
- Changes in feelings about inheritances; or
- Special needs considerations.
Note that in some circumstances the beneficiary may not be able to be changed.
Last updated December 20, 2025
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