Updating Your Will After Divorce
Update Beneficiary Designations
Updating your will after divorce is important as you want to ensure that it covers some of your most valuable assets, and to whom you would like to see receive those assets. Many assets pass outside of a will, to beneficiaries named on paperwork provided by a bank or insurance company. For this reason, it is important to update beneficiary designations in your will. Some beneficiary designations that may need to be updated are:
Life insurance policies
Retirement accounts such as IRAs and 401(k)s
Pay-on-death bank accounts
Transfer-on-death brokerage accounts
To name a new person to inherit these assets, request new documents from your bank, brokerage company, or employer, and submit them as soon as possible.
Don’t assume that state law (or even the terms of a divorce decree) will revoke any earlier designations you made that name your former spouse as a beneficiary. Certain “qualified plans,” such as 401(k)s, pensions, and employer-provided life insurance policies, are governed by a federal law called ERISA (the Employee Retirement Income Security Act). ERISA states that a plan administrator must turn funds over to the beneficiary named in the plan documents, regardless of what the state law says. Therefore, unless you update beneficiary designations, if your former spouse is still the named beneficiary, he or she will inherit your assets.
Updating your will after divorce can be a daunting task. Let the estate planning attorneys at Taroff & Taitz, LLP help you with wills, trusts and estate planning. Ensuring that you update beneficiary designations is an important part of updating your will, and our attorneys can assist in guiding you through this process.