Don’t Forget to Update Beneficiaries After a Gray Divorce
Some states automatically revoke a former spouse as a beneficiary on some accounts. Waivers can be used, too. Best not to leave it up to your state, though.


Editor’s note: This is part three of an ongoing series throughout this year focused on helping older adults navigate the financial difficulties of gray divorce. See below for links to the other articles in the series.
If you're fortunate enough to have a conscientious financial adviser, you've probably been reminded that it is a good idea to periodically check your beneficiaries on all your investment and retirement accounts and life insurance policies.
For people going through mid- to late-life divorce, it's even more important.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While family law attorneys obviously focus on the division of assets between parties while they're still alive, consideration must be given to what might happen to those assets upon a party's death, either during or after the divorce process, the likelihood of which obviously increases for people getting divorced later in life.
Amanda Wedl, an estate planning attorney in Nevada, insists, “Don't depend on your divorce decree to solve or to be your estate plan. Empower yourself to be sure your goals are being addressed.”
Wedl recommends meeting with an estate planning attorney soon after divorce to ensure your plan is updated to meet your needs.
Update your beneficiaries
Estate planners advise not to rely on revocation upon divorce statutes. Such statutes exist to revoke a spouse as a beneficiary in the event of divorce. These statutes are meant to protect what might simply be an oversight after dealing with the emotional trauma of divorce. The assumption is that the decedent intended to remove the former spouse as beneficiary from various financial accounts post-divorce but forgot to do so.
Today, more than 40 states have some type of revocation upon divorce statute that impacts beneficiaries listed on IRAs, bank accounts, insurance policies, trusts and wills. Of these 40 states, 26 automatically revoke a spouse as a beneficiary in the event of divorce.
But watch out! Automatic beneficiary revocation laws do not apply to Employee Retirement Income Security Act (ERISA) and federal life insurance and retirement benefits.
The rules are different for 401(k) accounts, pensions and other federal plans under the ERISA laws. In these cases, pre-divorce designations typically remain in place until you change them — no matter what state you live in. ERISA supersedes state laws as they relate to retirement plans.
“ERISA cannot be held to interpret all 50 states’ laws and types of property settlement agreements,” says Wedl. “The ERISA plan document controls.”
Sometimes waivers are put in place
Despite ERISA plan documents controlling the distribution of assets upon death, many attorneys rely on client waivers in the divorce decree. Waivers are often used in divorce when both parties have similar retirement benefits or when 100% of another marital asset — for instance, the house — is being used to offset another spouse’s employer-sponsored retirement plan.
If there are waivers in property settlement agreements, the question arises whether these waivers are sufficient to waive any survivorship benefits associated with either defined contribution or defined benefit plans.
This question was addressed in 2009 by the U.S. Supreme Court in Kennedy v Plan Administrator for DuPont Savings and Investment Plan. In this case, Mr. Kennedy was a participant in the DuPont Savings and Investment Plan, a defined contribution plan governed by ERISA. In their divorce decree, Mrs. Kennedy waived her interest in the plan. After Mr. Kennedy died in 2001, it was noted that he never changed the original beneficiary designation on the plan account, nor was there a contingent beneficiary listed. DuPont thus transferred the retirement account to Mrs. Kennedy, despite the fact she long ago waived her interest in the plan. Mr. Kennedy's estate challenged the award, but the Supreme Court ultimately found for Mrs. Kennedy despite her having waived an interest in it decades previous.
Attorney Lindsay Childs in her book Divorce in the Golden Years points out that unless lawyers know what the specific plan documents require and follow through with clients to ensure that all necessary steps are taken to waive any survivorship benefits, general waivers of these types are not going to be effective to waive these interests. The only practical way to deal with the issue is to include language in property settlement agreements notifying clients of their responsibilities under their plan’s documents.
Wedl notes another potential drawback of state automatic revocation laws. “Maybe you do want your ex-spouse involved. Some divorces are more amicable, and the relationship will continue afterwards. Make sure your estate planning documents reflect that. Don't leave it up to your state to determine your estate plan.”
OTHER ARTICLES IN THIS SERIES
- Introduction: Happy New Year: Let’s Get a Divorce
- Part one: How Does a Gray Divorce Affect Social Security Benefits?
- Part two: In Gray Divorce, Two Financial Planning Yardsticks Are Key
Related Content
- A Financial Guide to Gray Divorce
- Four Steps to Prepare Your Finances for Divorce
- Five Tips if You’re Getting Divorced in 2024
- You’re Divorcing or Lost Your Spouse: What Do You Do Financially?
- Beware of These Three Hidden Costs of Divorce
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Andrew Hatherley is the founder of Transcend Retirement, LLC and Wiser Divorce Solutions, LLC and the host of The Gray Divorce Podcast. After going through his own mid-life divorce, Andrew decided to help other people avoid the financial and emotional stress so common to the process. He earned the designation Certified Divorce Financial Analyst® and is trained in mediation and Collaborative Divorce. He is also a member of the Amicable Divorce Network.
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's Guide
When the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
The Most Tax-Friendly State for Retirement in 2025: Here It Is
Retirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Five Ways to Maintain Charitable Giving During Volatile Times: A Giver's Guide
When the economic outlook is uncertain, charitable giving is even more important — and impactful. You can be strategic by using donor-advised funds, diversifying assets and prioritizing unrestricted gifts.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting Tips
You're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a Portfolio
Exchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term Care
Planning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
-
Five Questions to Help Ensure a Happy, Secure Retirement
You need to drill down to what you really want out of retirement. Then you can get down to the business of crafting a financial plan to make it happen.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting By
Learning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
How to Buy an Annuity Online (Without Regret)
You should never be rushed into buying an annuity. But now that they can be sold quickly and easily online, you need to be more alert than ever to pushy salesmanship. Here are four signs you're working online with a professional.
-
How Much Income Will an Indexed Annuity Get You? An Annuities Expert Lays Out the Numbers
Guaranteed lifetime income sounds great, but how much will it be? Several factors determine your future payout on indexed annuities with an income rider.