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If this question has you scratching your head and you are uncertain of the answer, you must confirm your beneficiary status as soon as possible.

More than likely, while you were married, your beneficiary was your spouse.  A significant part of financial housekeeping after a divorce involves reviewing your named beneficiaries on 401(k)s, 403(b)s, IRAs, ROTH IRAs, life insurance through your employer or on individual policies, transfer or payable on death registrations, brokerage accounts, and any other type of instrument on which a named beneficiary is designated.  However, it is important to not change any beneficiaries until after the divorce is finalized and to adhere to the terms of the divorce judgement.

You may even be under the impression that you do not need to check on these accounts since you have updated your will, BUT your beneficiary designations supersede whatever is specified in your will.  To say this another way, even if you have changed your will to reflect different wishes, your ex-spouse could still inherit certain assets unless you have specifically changed your beneficiary designations.

Some divorce judgements will include a provision terminating a spouse’s interest; however, some insurers and ERISA plans are not required to follow the judgement of divorce.  This discrepancy could result in your children, or your intended beneficiary, in court disputing assets that you never intended to go directly to your ex-spouse.  It is critical to re-name all beneficiaries once your divorce is finalized.

At Bridgeworth, we work with clients by performing a beneficiary review. In doing so, we assess your family’s situation, evaluate your assets, and collaborate with your estate planning attorney to ensure the beneficiary designations stated in your will coordinate appropriately with your accounts.

This content does not constitute legal, tax, accounting, financial, or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals based on your specific circumstances. We do not make any warranties as to the accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

Bridgeworth is now a part of Savant Wealth Management as of 11/30/2023. Savant Wealth Management (“Savant”) is an SEC registered investment adviser headquartered in Rockford, Illinois.