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Changing beneficiary designations after divorce

It is fairly common for married people to designate their spouses as beneficiaries under different types of financial accounts. Bank accounts, life insurance policies and retirement plans are just a few sources of financial security that Illinois residents may possess. When the owner was still married, it likely made sense to make his or her spouse the beneficiary. Now that a divorce has been finalized, a divorced person may want to make a change.

Designating a beneficiary is an important process because it determines who will receive benefits after an individual's death. If the divorce has already been finalized, the beneficiary can be changed in most cases without too many obstacles. However, if the divorce proceedings are still underway, the designations cannot be changed.

If a spouse was listed as the beneficiary under certain retirement plans that are governed by the provisions of ERISA, his or her consent will be required before a change can be made. Many people believe that simply amending an existing will or preparing a new one serves the purpose of disinheriting a former spouse, but this is generally not the case with accounts that have designated beneficiaries, as those designations will override provisions to the contrary in a will. It is accordingly important for owners of these types of accounts to periodically review them and to change the designations should circumstances so dictate.

The divorce process can often be emotional and can cause the parties who are going through them to fail to pay attention to details. A lawyer who has experience with high asset divorces can assist a client who is contemplating ending a marriage in ensuring that all relevant documents are updated to reflect the future unmarried status.

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Goddard & Malmquist
1250 South Grove Avenue
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Barrington, IL 60010

Phone: 847-382-3995
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