Beneficiary Designations Go Beyond “Who Gets the House?”

We’ve been talking a lot about beneficiary designations.  It is a signal to our readers that, yes, they are important!  Nonetheless, popular culture has us stuck on the same question:  Will it be John or will it be Jane Doe who keeps that gorgeous house down the street after their divorce?  The far more interesting inquiry is whether Jane will remember to change the beneficiary designations on her life insurance policy, employee benefit plan, IRA, and the like.  If she does not, and if the divorce agreement does not specifically state otherwise, we can probably forget about that house down the street – John may very well inherit enough money to buy one twice as big, or a yacht, or a Kinkade, or a . . . well, you get the idea.

To help our Maryland, Virginia, and D.C. clients understand what happens to their wills, revocable trusts, retirement accounts and life insurance policies after they divorce, we created a handy chart, which you can find here.  As you can see, after divorce, bequests in a Will to former spouses are typically void.  On the other hand, it is unlikely that your divorce will nullify a revocable trust distribution to your ex-spouse or, in Maryland and D.C., prevent him or her from taking under your life insurance policy or retirement account,  if he or she is the named beneficiary.

Ambiguity in the law and a ton of litigation on this point caused Florida to enact legislation, effective this July, declaring that after marital dissolution or annulment, ex-spouses named as beneficiaries in many common non-probate assets like employee benefit plans, individual retirement accounts, life insurance policies, and qualified annuities will be treated as if they died before the decedent, with a few exceptions.  This is great for all those forgetful Floridian Jane Does, but is it enough?

The only local jurisdiction with a law similar to Florida’s is Virginia.  In Virginia, after divorce or annulment, revocable beneficiary designations naming a former spouse are void in non-probate assets like life insurance and annuities.  Code of Virginia § 20-111.1.  Regardless, we recommend to our Virginia clients – like all of our other clients – that they update their documents and beneficiary designations post-divorce.  This is because there is likelihood that, even with an ex-spouse “x”ed out, there will be holes in a person’s documents, especially if he or she did not plan specifically for the ex-spouse’s death at the time the documents were drafted and when beneficiaries were named.  If you are divorced, or if you are in the midst of one, call Altman & Associates at (301) 468-3220 or email us at so that we can start asking the right questions and have your plan properly updated.

-  Gary Altman, Esq. and Coryn Rosenstock


Another IRA Beneficiary Snafu
Beneficiary Designations:  An Integral Part of Carrying Out an Estate Plan 

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