Change Your Beneficiaries Following Your Divorce

change your beneficiaries, divorce, Illinois Divorce AttorneyAfter months of negotiation and a seemingly endless wait for the court, you finally have been granted your divorce. Your divorce decree most likely represents an opportunity to start fresh and to pursue a happy life, following a less than ideal marriage. In the days and weeks following your divorce, you will probably have a list of details to address such as possibly changing your name—if you changed it when you married—or opening new, individual accounts. One of the most important things you will need to do—and one that is frequently overlooked—is to change your beneficiaries on existing investment plans, life insurance policies, and estate planning documents like wills and trusts.

Binding Contracts

When you created your retirement account or purchased your life insurance policy, you were probably asked to designate beneficiaries. For a retirement plan, your plan administrator keeps beneficiary information on file will disburse your investments to those individuals in the event of your death.  Similarly, the whole purpose of your life insurance policy is to pay benefits to your designated beneficiaries when you die. These agreements are binding contracts which are not necessarily broken by the existence of a divorce decree.

Potential Consequences

If you forget to change your beneficiaries, despite being permitted to do so by the terms of your divorce agreement, your existing contracts will remain in place. Upon your death, the ex-spouse you divorced decades ago could receive an unexpected check in the mail, when you probably should have directed that it go to someone else. In 2013, the U.S. Supreme Court ruled in favor of an ex-wife who had inadvertently been left as a man’s life insurance beneficiary, despite the man’s remarriage. The couple’s divorce, the court decided, was not sufficient to break the existing agreement between the man and his life insurance company without additional action.

Just a Few Minutes

In most cases, it is very easy to change your beneficiaries. Your plan administrator and life insurance carrier probably has an online portal through which you make changes in a matter of seconds. If they do not, you can be mailed a form in a just a few days and designate new beneficiaries that way. Other changes, such as revamping your will, may be a bit more complex but can still be done fairly quickly.

Before you make any changes, it important to understand your obligations under your divorce decree and if such amendments are permitted. An experienced Aurora family law attorney can help you through the process and ensure you remain in full compliance with your agreement. Call the Law Office of Matthew M. Williams, P.C. today to schedule your free initial consultation.

 

Sources:

http://www.forbes.com/sites/jefflanders/2013/12/04/divorcing-women-dont-forget-to-update-these-key-documents/

http://www.forbes.com/sites/deborahljacobs/2013/06/03/supreme-court-favors-ex-wife-over-widow-in-battle-for-life-insurance-proceeds/

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