How Does Divorce Affect my Beneficiary Designations?


When the dust clears after a divorce is finalized, you probably think about making changes to your Will. But you might not realize that the beneficiaries for assets such as individual retirement accounts (IRAs), 401(k)s and life insurance policies must also be changed.

In many states, divorce will automatically revoke all spousal bequests in a Will.  It is a common misconception that the same is true for life insurance and IRA’s.  While a property settlement agreement may lay out the agreed-upon changes for these assets, making the actual changes often requires an affirmative action by the plan owner (e.g. submitting a change of beneficiary form).  Whether you need to do anything to remove your ex-spouse as the beneficiary of a particular asset depends on the type of asset and the applicable state or federal law.

IRAs: IRA beneficiary changes are governed by state law as well as the terms of the IRA agreement itself.  Where an individual names his or her spouse as the beneficiary of an IRA but later divorces, most states do not require anything further to remove the ex-spouse as beneficiary.  But it is important to see what your IRA plan says happens next—without any further action, the beneficiary of many plans will default to your estate (which could bring about a whole new set of issues).

Employer Plans such as 401(k)s:  Employer plan beneficiary changes are governed by federal law which says that the last-named beneficiary is entitled to the proceeds of the plan upon an individual’s death, even if the last-named beneficiary is an ex-spouse.  Therefore, if you do not want to leave your 401(k) to your ex-spouse, it is important to submit a change of beneficiary form to your 401(k) plan administrator after your divorce.

Life Insurance: The prevailing state law is that the designation of a spouse as beneficiary entitles him or her to the proceeds of the insured spouse’s life insurance policy, even if the couple is later divorced.  As with 401(k)s, a change of beneficiary form should be submitted to remove the ex-spouse following divorce.

You should always consult an estate planning attorney after a major life event such as divorce to make sure your estate plan still reflects your wishes.  In regards to named beneficiaries, you should always change beneficiaries after divorce to make sure your designations reflect your wishes.

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About Pamela Quattrone

Pamela A. Quattrone, Esq., MBA is an Associate attorney at the Law Offices of Nancy M. Rice. Pamela dedicates her practice to estate, tax and long-term care planning, estate administration, guardianship, and litigation related to each of these areas. She also works with individuals and their families to address asset-preservation issues and long-term care concerns.​Rice Elder Law.

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