Why has TRS encouraged members not to name a trust as their beneficiary?

Unless qualifying language is used, a trust is treated as a nondependent beneficiary. Many times a trust has not been worded in the way that will allow TRS to pay a monthly survivor benefit to the trust. Therefore, naming the trust did not help the member, and TRS was not able to pay monthly survivor benefits to the trust.

Why would my attorney tell me to have a trust as my beneficiary when TRS states that many trusts don't end up receiving the TRS benefits?

Many attorneys are not familiar with TRS and the types of benefits paid out. TRS survivor benefits are not life insurance. Many trusts, therefore, end up worded incorrectly and the benefits are unable to be paid to the trust.

I want to name a trust as my beneficiary. What should I do?

Send a Member Information and Beneficiary Designation form listing the trust and a copy of the trust to TRS. The trust must specifically state that the trust will receive TRS benefits on behalf of your dependent beneficiary and not be used for any other purpose. You may have your attorneys call and speak to the TRS Legal Department or send a draft of the trust to the Legal Department for review. Trusts cannot supercede TRS law (e.g., cannot receive a monthly survivor benefit on behalf of a nondependent beneficiary).

What happens to my TRS benefit if I have a trust as my beneficiary and the trust is not eligible to receive a monthly survivor benefit?

After your death, the trustee will need to file a waiver and disclaimer. Then the benefit will be paid as if you had indicated an automatic designation on the Member Information and Beneficiary Designation (MIBD) form.

If TRS receives a Member Information and Beneficiary Designation (MIBD) form that lists a trust and a copy of the trust is not with the MIBD, will TRS notify me that a copy of the trust is needed?

No. A copy of the trust will not be requested until after your death. More often than not, at the time of death, beneficiaries find that TRS cannot pay benefits to the trust.

Can I name a trust for Part A, refund of accumulated contributions, and my spouse in Part B?

Yes. A lump sum may be paid into a trust

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