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What Happens to Beneficiary Designations After Divorce in South Carolina?

Posted by J. Benjamin Stevens | Jul 15, 2015 | 0 Comments

After going through the the pain of a divorce, the last thing most people want to deal with is calling their retirement funds and insurance companies and requesting the paperwork to change their beneficiary designations after divorce. Estate planning is likely far from most people's minds once the divorce is over. While that may be understandable, it is very importantto keep address estate planning issues after your divorce, as you will probably want to make several important changes in that area, such as beneficiary designations.

Though some states have no laws on the subject, requiring divorced couples to take action themselves to immediately remove their former spouse as beneficiary, South Carolina lawmakers tried to make things a little bit easier on divorced couples by enactingSouth Carolina Code § 62-2-507. This portion of South Carolina's Probate Code addresses revocation by divorce, and it clearly states that a divorce or annulment in South Carolina revokes any “beneficiary designation made by a divorced individual to the divorced individual's former spouse in a governing instrument…” In other words, in South Carolina, once you've divorced your spouse, all beneficiary designations made to the former spouse are automatically revoked. For example, naming your former spouse as a beneficiary on your life insurance or 401(k) plan are all automatically undone by the divorce, as § 62-2-507 results in those beneficiary designations being revoked once the Divorce Decree is issued.

So does this mean your estate planning problems are solved? Unfortunately, the answer is no. While you may not have to worry about your former spouse running off with your money when you die, you still need to take the necessary steps and complete the appropriate forms to make sure that your beneficiary designations are accurate and in line with your wishes. Once your spouse has been removed as a beneficiary, the next beneficiary listed will be entitled to the asset. However, this only works if you have other beneficiaries listed. If there are no successor beneficiaries, then the asset will become part of your probate estate upon your death and will need to be divided up that way, taking far longer than if you simply taken the steps to ensure that your  beneficiary designations were updated and current.


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J. Benjamin Stevens

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