You Could Accidentally Disinherit Your Children Unless You Follow This Obscure Rule

True story: A father with three kids put them down as the beneficiaries of his nearly $250,000 401(k) account – but when he died, they got nothing. It’s all because of ERISA. Never heard of it? Neither had he.

A mom and daughter talk on a couch.
(Image credit: Getty Images)

If you’re widowed or divorced and have named your children as the beneficiaries of your company retirement plan, you could be putting them at risk of being disinherited if you remarry.

Due to a little-known ERISA rule, if your new spouse outlives you, they will receive your company plan funds, rather than your children — even if you have put your children down as your named beneficiaries.

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Mike Piershale, ChFC
President, Piershale Financial Group
Mike Piershale, ChFC, is president of Piershale Financial Group in Barrington, Illinois. He works directly with clients on retirement and estate planning, portfolio management and insurance needs.