After all the stress of divorce, many spouses don’t follow through and change the beneficiaries they’ve designated on all their retirement accounts, insurance policies, and other documents.
But this is a critical step. If you have any questions about what needs to be changed, we’d be happy to help you.
Here’s a good example of what can go wrong: When a Florida couple got divorced, the husband was awarded a deferred compensation plan that he had opened during the marriage. At the time he opened it, he had named his wife as the beneficiary who would be entitled to death benefits.
The husband never got around to changing the beneficiary, and he died unexpectedly a year later.
As a result, his ex-wife and his other heirs went to court over who was entitled to the money.
The result? The Florida Supreme Court decided that the ex-wife was entitled to the benefits. The husband could have changed the beneficiary designation at any time, the court said, and if he failed to do so, his other heirs were out of luck.