Colette Purdy: Designating a beneficiary really takes very little time and it protects your family and loved ones for the future.

Anne: Hello, and welcome to Employee Podcasts. We’re doing something a little different this month. We’re learning about beneficiaries, who they are, and why they’re important. And today, we’re talking with Colette Purdy, Supervisor of Survivor Benefits at Costco. Hi, Colette.

Colette: Hi, Anne.

Anne: Really happy you’re here. It’s a really important topic. Can you tell us, how long have you worked at Costco, and where are you based currently?

Colette: I’m the supervisor of the Survivor Benefits team here in the corporate office in Issaquah, Washington. I’ve been assisting employees with their benefit questions for almost 20 years. The majority of that time has been in managing the survivor benefit process.

Anne: So let’s jump right in. What is a beneficiary, and why is it important to choose one and then also make sure they’re up to date?

Colette: Simply put, a beneficiary is the person you want to receive your life insurance, your 401(k) retirement plan, final wages, and money or stock from Costco’s Employee Stock Purchase Plan should something happen and you pass away unexpectedly.

If you don’t have a beneficiary designated, the default or beneficiaries may not align with your wishes.

Anne: Just to clarify for those listening, you automatically get a life insurance policy that’s paid by Costco when you enroll in a Costco medical plan, and like the other survivor benefits just mentioned, you’ll want to choose who receives those funds if something happens to you. Colette, how do you even go about choosing a beneficiary?

Colette: Well, we encourage you to think about who you want to be the recipient of your life insurance and your 401(k). You know, you don’t have to have more than a person’s name and their contact information. At least get a name. It doesn’t have to be a person.

It could be a religious organization or a charity, and you can name someone who lives outside of the U.S. It doesn’t have to be someone who lives within our country. If you do not designate a beneficiary, survivor benefits will determine who is eligible or search to find a rightful beneficiary.

Anne: So I understand there are some important differences when it comes to thinking about designating beneficiaries for life insurance and then for 401(k).

I think the big thing there is just check, check your beneficiaries regularly, right? And make sure they’re up to date.

Colette: Yeah, and you know, you can update your beneficiaries or designate a beneficiary at any time. We often remind employees to review their beneficiaries at least once a year during Annual Enrollment, but you know, like I said, you can do it at any time, not just during November.

Anne: Absolutely. If there’s a major life event, right, like a marriage, separation, or divorce, that’s obviously a great time to go in there and update your beneficiaries in all of the places.

Colette: Oh, yeah. Forgetting to remove somebody that you broke up with 10 years ago or failing to update designations after a divorce or after your marriage or if you do have a legal separation.

Um, you know, if you have a divorce and the agreement mandates that your ex-spouse remains your beneficiary, you need to update your designation to reflect that new relationship. Be mindful that a separate — just because you separate from your spouse, that is not considered a, quote-unquote, “legal separation.”

You need a court order for that, so technically, you’re still married even though you may not be living together anymore.

Anne: If I’m looking to go in and make an update to, say, my life insurance later today, do you have a sense of how long it takes to do so?

Colette: Designating a beneficiary really takes very little time.

You know, the whole point is when you name multiple beneficiaries, that they add up to 100%. If you just have one person, it really doesn’t take very long. If you have a whole family and grandchildren, whoever you want to be your beneficiaries, that can take a little bit of time.

Anne: Is there a lot of, like, other kind of information I should make sure I have on hand?

Colette: You know, put their name in, but it’s really important to put proper contact information. I mean, if your, if your husband’s name is John Smith, we really want to know which John Smith. So in those circumstances, it would be helpful to have a Social Security number. But when you first designate, you don’t have to have that.

You can always add that in at a later date. And you want to make sure that you designate a percentage if you have more than one beneficiary. For example, on the life insurance, if you name a beneficiary, but there’s no indication that that person should receive 100%, the insurance company will look at that as having no beneficiary designation.

Anne: So while you’re going through this whole process, when you’re thinking about choosing a beneficiary, updating one, are there things to watch out for or avoid?

Colette: Well, something you should think about is if you have minor children. You should think carefully about that because when you name a minor, it restricts their access to life insurance or the 401(k) until they reach the age of majority or age 18.

You know, if you want to provide for their upbringing if something happens to you, think about a trust or name a trusted guardian instead. Make sure if, if, for example, you were raised by one parent and you want to make sure that parent receives your benefit, make sure that parent is designated 100%.

Otherwise, again, if there’s no beneficiary designated, your benefit will be divided equally between your parents if you’re not married and you don’t have any children.

Anne: Can you tell us a little bit more about naming a trust?

Colette: Yeah. You can, you can have a trust, um, like an, uh, that names your child as the beneficiary, and then you would name, you know, someone that you that you trust to be the trustee of the trust.

You know, if, especially when you name a minor because if you want to provide for their upbringing before they turn 18, a trust is very helpful. Or if you want to name your beneficiary per the terms of your will. In either case, your beneficiary must be named the trust as it is written or the will, you know, as it’s titled.

Anne: Okay. Such important information to keep in mind. And you know, trust is in the name. Think about someone you trust for the trust.

It’s time for the question. What is your favorite Costco product, and why?

Colette: Hands down, it’s the Kirkland Super Premium Vanilla Ice Cream. It is creamy, and it’s delicious.

And I think one of the nice things about it, it doesn’t have a long ingredients list. You know, there’s not a lot of additives. And more recently, I have fallen in love with the mini Oreo ice cream sandwiches. They come in a little 3-pack, and they’re, they’re really yummy.

Anne: I have a very big sweet tooth, and so these are, these sound like very delicious items that I need to get immediately.

Well, thank you so much for being here today and for educating us about the importance of choosing beneficiaries and keeping them up to date. And a big thanks to everyone who listened in today. And if I may, I think now might be a good time to double-check your beneficiaries.

Until next time, remember: We’re in this together.