Deceased worker’s retirement benefits go to sister, not wife

If you’re getting married and want your retirement and other similar benefits to go to your new spouse if you pass away first, it’s very important to update all your policies and plans to name your spouse as the beneficiary. Otherwise, your property might not get distributed in the way you want.

This happened recently in Texas. A man got married in 2003 but never changed the beneficiary designation for his retirement benefits. He died eight years later.  His wife was also the executor of his estate and went to probate court seeking a ruling that the benefits were rightfully hers as “community property.” The judge, however, said they belonged to her late husband’s sister, who was named as the beneficiary.

The wife appealed. But the Texas Court of Appeals upheld the decision, pointing out that benefits associated with the husband’s employment during their marriage might be considered community property, but that wasn’t the case here.

If you’re not sure that the beneficiaries on your own retirement plans and life insurance policies are completely up-to-date, talk to a family lawyer about the potential implications.

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