When Arizona residents divorce, they often do so with the intention of not leaving any of their assets to their former spouses upon their deaths. In order to prevent a former spouse from receiving such things as the proceeds of retirement accounts or life insurance policies, it is important that people carefully review and change their beneficiary designations on those accounts and policies accordingly.
Some people believe that by rewriting their will and including language specifically excluding the former spouse, that is enough. That is not the case, however, because beneficiary designations will override the contrary provisions of a will. Thus, it is important to change the existing designations on the individual accounts and policies.
The timing of changing the designated beneficiaries is important as well. If possible, people should make the alterations prior to filing for the divorce. Any beneficiary changes to plans that are governed by ERISA will require a signed waiver from the other spouse, however. If a person waits until the divorce has been filed, they will be prevented from changing the beneficiaries until the divorce is finalized. Those whose divorces have already been filed will thus have to wait until after they’ve received their decree.
In some divorce cases, the spouses will be able to reach an agreement through mediation. Sometimes, an agreement will include one spouse’s pledge to continue providing life insurance for the benefit of their spouse after the divorce. It is important for people who have that agreement in place to make certain the spouse reaffirms them as the intended beneficiary after the decree is issued. If the intention for the former spouse to be the designated beneficiary is not reaffirmed, courts will sometimes decide the spouse was not the intended recipient, instead providing the benefits to another person.