Annuities, retirement plans, transfer on death bank accounts and life insurance policies are all examples of the types of assets that are passed on pursuant to beneficiary designations. Some California residents may want to update their beneficiaries if they divorce to ensure that the former spouse will no longer stand to receive the proceeds of these accounts.
One exception to this might be individuals who are paying child or spousal support and want to ensure that a life insurance policy or other assets go to the spouse to continue covering these expenses. However, even in these cases, it is a good idea to update beneficiary forms after a divorce is final to reaffirm one’s intentions. This reduces the chances that the designation might be challenged after the owner’s death.
For those who do not wish to keep an ex-spouse as a beneficiary, timing can be important. It might be difficult to make the change prior to filing for divorce because the spouse may need to sign papers to change the primary beneficiary. Even if this is not the case, if an individual does not want the spouse to find out about the changes, the spouse may still be notified. If it is not possible to make the changes before the divorce is in progress, doing so should be a top priority once it is finalized.
Those who are involved in high-asset divorces may wish to work with an attorney who has experience with complex property division. In some cases, all or a portion of a retirement account that had been established as part of a spouse’s employment package might be considered to be community property. The owner may wish to keep the account to pass on to a child from a previous marriage, and an attorney may be able to help negotiate this.
