If you are in the midst of a divorce, or if you are already divorced, it is important to review the beneficiary designations on your retirement accounts, life insurance policies, wills, etc. to avoid unintended consequences. The general rule is simple. If you pass away without updating your beneficiary designations after a divorce, your ex-spouse is usually not treated as the beneficiary. This rule applies unless one of the following is true:
- The designation clearly states that it was meant to remain in effect after the divorce
- You named your ex-spouse after the divorce was finalized
- A court order requires your ex-spouse to stay as the beneficiary
- You and your former spouse signed a written contract requiring the designation
If you’re unsure about your documents or obligations, our divorce lawyers can help you review your designations and protect your interests.
Divorce and Beneficiary Designations
Beginning on May 2, 2023, divorce decrees issued in Pennsylvania will be required to include new language, specifying that parties must reaffirm or change the beneficiary status of their ex-spouses for life insurance policies, annuity contracts, pensions, profit sharing plans, or other “contractual arrangements.” Failure to reaffirm or change the beneficiary status of an ex-spouse may result in revocation of the beneficiary designation. The new language included in divorce decrees should serve as a reminder to divorcing spouses that they should update their beneficiary designations.
If you have questions about beneficiary designations after divorce, or you are interested in discussing your particular circumstances with an attorney, contact Tanner Law at 717-731-8114 to schedule a consultation.