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Beneficiary designations need to be updated after a divorce

Besides the family home, a person's retirement accounts are often the largest asset a person has. These accounts can have thousands of dollars in them, and for people in Texas who are facing a divorce, it can be important to have the beneficiary designations updated.

When a couple is married, the beneficiary of an individual's retirement account is often their spouse. Accounts that have a beneficiary designation include savings accounts, life insurance, retirement plans, brokerage accounts and annuities. If a person is going through a divorce, they cannot change the beneficiary information and it has to wait until the divorce is finalized. Before a divorce process begins, a person may want to change beneficiary information, but they should keep in mind that if both partners have accounts with the same financial advisor, that advisor may let the other spouse know about the beneficiary change. If a beneficiary is not changed, the ex-spouse can inherit the benefits even if the divorce is final. If a person neglects to change their beneficiary information, it can lead to extensive legal headaches.

A person who is facing a divorce may want to speak with a legal professional skilled in family law. An attorney is well-versed in property division and other important matters that need to be addressed in a divorce. They can guide their clients through these confusing matters.

If a person does not change their beneficiary information due to a divorce, their ex-spouse could receive their benefits upon their death. It is often a good idea for a person to change their beneficiary information as soon as they can legally do so.

Source: Forbes.com, "Divorcing women-Know the laws affecting your beneficiary designations", Jeff Landers, April 9, 2015

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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