Importance of Changing Your Beneficiary on Retirement Accounts
Earlier this year, the United States Supreme Court issued an important decision that potentially affects family law cases all across the country. In Kennedy v. DuPont, the Court resolved a dispute between an ex-wife and the her ex-husband's daughter over the proceeds of a savings and investment plan (SIP) that was an Employee Retirement Income Security Act (ERISA) benefit plan.
The lesson to be learned from this case is that if you divorce, you must change your designated beneficiary forms under any pension and/or retirement plan covered by ERISA. You need to actually make the change yourself (in accordance with the rules set forth by your employer), and you cannot simply rely on a waiver of benefits in your Divorce Decree or Qualified Domestic Relations Order (QDRO). If you fail to change the beneficiary form, it could result in unintended consequences at your death - such as your former spouse getting your benefits!
Source: "U.S. Supreme Court Says Ex-Wife Gets Pension Benefits" by Robert Kisselburgh, published at his Mississippi Family Law Blog.
