Change Beneficiary Designations after Divorce

After a divorce, formerly married people must revisit their estate planning, including beneficiary designations, wills and trusts.  In particular, changes must be made to retirement plans in accordance with the rules set forth by respective employers because children and/or new spouses may not be eligible to receive benefits.

The language of the beneficiary designation form and the plan procedures control the distribution of benefits, not a will or a divorce agreement.

In January 2009, in Kennedy v. DuPont Plan Administrator, the U.S. Supreme Court decided against a woman suing her late father’s pension plan for money her mother received, even thought the mother had forfeited her rights to the pension in their 1994 divorce. The Supreme Court decided that the beneficiary designation form and the procedures set under the plan were sole determinants of benefit distribution. This means that plan administrators must pay benefits as provided in the original beneficiary designation form, in spite of a divorce decree.

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