-Father is in 70s, retired, and receives a monthly CalPERS retirement benefit (along with social security).
-When father retired roughly 20 years ago, mother was named as the beneficiary of this CalPERS monthly benefit. She passed away April 2019.
-Father has several health conditions, may not live too many more years, and named me as the new beneficiary in 2019 after her death.
-Naming a new beneficiary reduces the CalPERS monthly benefit (by half roughly, in this case), but gives the new beneficiary a permanent monthly benefit after the retiree dies.
-My mother's death was considered a "qualifying life event", which allows CalPERS retirees to switch their beneficiary. He chose "option 2w" when designating me (not sure if this is relevant).
-Also in 2019, planning for Medi-Cal long term care, he gifted me over $30k worth in assets. A Form 709 is being filled out for these.
Some extra information which may or may not be helpful, from CalPERS:
https://www.calpers.ca.gov/page/active-members/retirement-benefits
"Lifetime Benefit: Your lifetime beneficiary will start receiving a monthly benefit after your death. You can change your lifetime beneficiary if you've had a life event. Go to Change Retirement Benefit to name a new beneficiary and change your current option."
From "What You Need to Know About Changing Your Beneficiary or Monthly Benefit After Retirement" (page 7) :
https://www.calpers.ca.gov/docs/forms-publications/changing-benefic[product key removed]ement.pdf
"How Your Retirement Allowance Is Impacted
When you add or change a payment option beneficiary through the Modification of Original Election at Retirement process, your current retirement benefit is reduced to fund your new beneficiary’s future benefit.
How much it’s reduced depends on:
• Your original payment option, and
• Your and your beneficiary’s age and life expectancy at the time of election.
Any cost-of-living adjustment and Purchasing Power Protection Allowance is also recalculated using your new lower base allowance. "
"Important! : If you choose to modify your original election at retirement, your new election is irrevocable. However, should you have a future qualifying event, such as the death of your beneficiary, you may be able to modify your allowance again and name a new beneficiary."
I am now helping him fill out his Form 709. My question is :
Is my father designating a new beneficiary for this CalPERS monthly benefit considered a gift he needs to report on IRS Form 709? Is there a certain monetary value associated with designating a new beneficiary in the eyes of the IRS, that is considered transferred to the beneficiary, and that needs to be figured out/calculated and reported? He did not get any tax form related to the beneficiary change from CalPERS.
Thank you.
