§ 103.0536.Designated Beneficiary

The guaranteed-term options in Section 103.0535 promise a fixed number of payments. This section says where the unpaid remainder goes.

Three structures are available to a claimant who selected the 180-payment or 120-payment option.

One beneficiary may take the whole remainder.

Two or more may take it in equal amounts, and if one of them dies before the payments run out, the comptroller recalculates so the survivors continue to share equally.

Or a primary beneficiary may be named with additional beneficiaries behind. The claimant may name up to four backups and sets the order in which they succeed. Payments go to one person at a time until that person dies or the remainder is paid out.

If every named person dies first, the remainder goes to the claimant’s estate, so the guaranteed payments are not lost to the state.

A designated beneficiary must be a dependent of the claimant. The section defines the word broadly for this purpose: a spouse, a minor child, and any other person the claimant is legally obligated to support, alimony included.

The dependency requirement keeps the annuity aimed at people the claimant supported. This is compensation for a life taken away, and the survivor benefit follows the household rather than a chosen heir.

The section also absorbs a terminated beneficiary. If a felony conviction ends a beneficiary’s payments under Section 103.154, the remainder passes as though that person had died on the termination date.