People often forget one of the most important things to do after a divorce is final, change beneficiaries!
Many people who marry and get jobs, usually name their spouses as beneficiaries of the company offered life insurance policy; name their spouse as beneficiary of their companies 401k; 403b; IRA; as well as bank accounts.
Years later, they may divorce and never think about removing their ex-spouse as beneficiary of these financial instruments, which can cause a disaster for any new spouses or your children.
So, if you pass away and your ex-spouse is called and told that he or she is a beneficiary of life insurance, 401k, IRA or bank balance, what should your current spouse do?
Thankfully, if you had a good attorney, there should be a provision in the Judgment of Divorce that revokes your ex-spouse’s status as a beneficiary automatically, and your new spouse only needs to consult your Judgment of Divorce to fix this situation. This needs to be done promptly to avoid any disbursement of proceeds.
There is also a statute MCL 700.2807 that saves your bacon. This statute revokes not only your ex-spouse as a beneficiary; it also revokes any of the ex-spouse’s family that was named as a beneficiary. Apparently, this kind of a thing happened so often, the Michigan Legislature did what people forgot to do for themselves after divorce. Note that this statute does not apply to financial accounts where the ex-spouse is named beneficiary after the date of divorce.
Need assistance with your divorce or estate? Call for a consultation today at 269-381-4471.