Retirement plan decisions made easy
Double-check your 401k Beneficiary If You've Gotten Divorced
Imagine that when you married, you named your wife as the beneficiary of your retirement plan in the event that you die. Twenty-two years later you divorce, and as part of the divorce settlement, your ex renounces her rights to your pension or 401k. Then you die, leaving all of your assets to your daughter.
Question: Who gets the pension or 401k money?
Answer: The ex-wife, not the daughter.
Says who? Says the United States Supreme Court
(News article about the case here.)
Lesson: Your beneficiary designation determines who gets your retirement plan money. Your will doesn't matter, your wishes don't matter, common sense doesn't matter. The only thing that matters is your beneficiary form. If you have a change in family circumstances, update your form.
For more information about death and divorce, check out Lesson 8 of our on-line course, The ABCs of Your 401k.
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