Tuesday, February 9, 2016
This article discusses the importance of updating all beneficiary designations in an estate plan. In 2001 the Supreme Court held in Egelhoff v. Egelhoff that the federal law governing ERISA preempted any contradictory state laws that disinherited ex-spouses. This case involved a divorced father who forgot to update the beneficiary designations on his retirement accounts. The stepmother ended up winning because she was still listed as the beneficiary of the retirement account after the divorce. This is a very common problem that people need to be careful to plan ahead for. This article provides a list of the type of common events that will trigger the need to update beneficiary designations in an estate plan. There is also a list of the type of assets through which a person may designate beneficiaries.
See Kyle E. Krull, What is the Big Deal about Beneficiary Designations?, Wealth Management, February 8, 2016.
Special thanks to Jim Hillhouse for bringing this article to my attention.