Updating beneficiary designations after a divorce

THE FRAMING
[Not really a conversation — more an action list with conversational anchors. The biggest mistake
divorced Americans make in estate planning is failing to update beneficiary designations after
the divorce. Most don't realize that beneficiary designations OVERRIDE the will. Your will can
say "everything to my new spouse" but if your IRA still names your ex, your ex gets the IRA.
Period. The probate court has no power over it.]

[Some states (about 20) automatically revoke ex-spouse designations on death. Some don't. Even
in states that do, federal law (ERISA) preempts state law for some retirement accounts. The only
safe assumption is: ASSUME NOTHING. Update everything.]

THE 60-MINUTE ACTION LIST

STEP 1 — Make the list (10 min)
Open a spreadsheet. List every account that has a beneficiary designation. Include:
- All retirement accounts (401(k), 403(b), 457, traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA)
- All life insurance policies (employer-provided AND personal)
- All annuities
- All HSAs (yes, they have beneficiaries)
- All transfer-on-death (TOD) brokerage accounts
- All payable-on-death (POD) bank accounts
- All 529 college savings plans
- Pension survivor benefits (especially if employed by a government entity)
- Stock options/RSU plans
- Any deeds with rights of survivorship

STEP 2 — Get the current beneficiary on each (20 min)
For each account, get the current beneficiary on file. Most institutions show it online; some
require a phone call. Document what's there. If you see your ex's name, prioritize that account.

STEP 3 — Update each one (30 min)
The mechanics vary:
- Employer 401(k)/403(b): your HR or plan administrator's portal. Often requires spousal
  consent if you're remarried; have your new spouse sign the consent form same day.
- IRA/Roth/Brokerage: usually online at the custodian (Fidelity, Vanguard, etc.). Login →
  beneficiaries → update.
- Life insurance: call the insurance company. They'll email or mail a beneficiary change form.
- Pension: HR or pension administrator. Survivor election may be irrevocable; verify.
- HSA: your HSA provider's portal.
- TOD/POD: visit the bank/brokerage with ID. Some require in-person; some allow online.

STEP 4 — Confirm in writing (the 30-day follow-up)
Within 30 days of each change, you should receive a confirmation. SAVE THESE. If you don't get
one, call. The change isn't real until it's confirmed.

STEP 5 — Update primary AND contingent beneficiaries
A common mistake: people update the primary but leave the contingent as their ex's mother or
ex-mother-in-law. If your primary beneficiary predeceases you, the contingent inherits — and
your ex-in-laws may not be who you want.

CRITICAL ACCOUNTS THAT BEHAVE WEIRDLY:

1. Employer-sponsored retirement (401(k)/403(b)):
   Under ERISA, your current spouse is automatically the beneficiary unless they sign a
   spousal-consent form waiving that right. If you remarried after divorce and didn't get
   spousal consent to name someone else, your new spouse may automatically be the beneficiary
   even if the paperwork says someone else.

2. Military Survivor Benefit Plan (SBP):
   Elections at retirement may be irrevocable. A divorce decree can require SBP coverage to
   continue for the ex-spouse for some period. Read your divorce decree carefully. Talk to a
   military legal-assistance attorney.

3. Social Security:
   Ex-spouse benefits may apply if you were married 10+ years and your ex dies. Doesn't reduce
   what current spouse receives. Often missed.

4. Federal TSP (Thrift Savings Plan):
   Form TSP-3. Beneficiaries override the will. Update immediately after divorce.

5. State-employee pensions:
   Some are governed by state law that auto-revokes ex-spouse designations; some aren't.
   Verify with your plan administrator in writing.

CONVERSATION WITH YOUR ATTORNEY (15-MIN PHONE CALL):

"I'm finalizing my divorce. My divorce decree says [WHAT IT SAYS about beneficiaries]. I want
to make sure I've updated everything correctly. Can you confirm my list of accounts is complete?
And can you confirm whether my state automatically revokes ex-spouse beneficiaries by statute?
Specifically I'm worried about [SPECIFIC ACCOUNT TYPES]."

A good estate attorney will charge $200-$400 for this conversation and save you tens of
thousands in potential litigation.

WHAT IF YOUR DIVORCE DECREE REQUIRES YOU TO KEEP YOUR EX AS BENEFICIARY?
This happens — often life insurance is required as a child-support security or alimony backstop.
Read the decree carefully. If the decree requires it, you cannot simply remove your ex without
violating the decree. But you can:
- Replace the policy with an equivalent one that names a trust for the children's benefit.
- Negotiate a modification with your ex if you both agree.
- Get the requirement released if it's no longer needed (alimony ended, children adult).

A divorce-experienced family law attorney can review.

UPDATING YOUR WILL AND TRUST AFTER DIVORCE:

Beneficiary designations cover individual accounts. Your will and trust cover everything else.
After divorce:
- Make a new will. Don't just amend. A clean new document avoids confusion.
- Make a new durable POA. Your ex is almost certainly listed as your agent.
- Make a new healthcare directive. Same issue.
- Make a new trust or amend your existing one. Trusts often name ex-spouses as co-trustees
  or beneficiaries.

This is roughly a $1,500-$3,000 attorney engagement. It's not optional. The penalty for
skipping is that your ex may end up making medical decisions for you in a coma, or inheriting
under an old document.

YOUR ONE JOB:
**Spend one Saturday afternoon doing this list. The cost of doing it now: 90 minutes. The cost
of not doing it: potentially everything.**

A FINAL NOTE:
If you have minor children, naming them as direct beneficiaries is usually wrong. They cannot
legally receive significant assets. Name a trust for their benefit instead, and name the trustee.
An estate attorney can set this up properly.