In the Supreme Court case, Hillman v. Maretta, highlights the importance of following through with updating documents and making necessary changes to your beneficiary designations. In this case, which originated in Virginia, Mr. Hillman named his first wife beneficiary of his life insurance policy. They subsequently divorced and Mr. Hillman remarried. He did not change the beneficiary designation on his life insurance policy. Although Virginia law revoked the former spouse as beneficiary upon divorce, because federal law governed the life insurance policy, the Supreme Court held that the former Mrs. Hillman, as the named beneficiary, was entitled to the policy proceeds, and not Mr. Hillman’s current wife. This case emphasizes the importance of reviewing all of your key documents after divorce to ensure that your beneficiary designations are up to date.
If you have a Separataion or Property Settlement Agreement prepared by or negotiated by Hess Family Law we try to address any potential negative consequences of the Hillman case, and provide as many assurances as possible that your separate assets will not go to your ex-spouse, unless that is what you want. Nevertheless, the best insurance that your assets will not mistakenly go to your ex-spouse, is to make necessary changes to any beneficiary designations.
Examples of documents and assets you will need to review and possibly update and/or change beneficiary designations include:
- Your Will;
- Beneficiary designations on retirement accounts;
- Other Directives such as Living Wills and Powers of Attorney;
- Deeds and titles; and
- Bank and brokerage accounts.
Taking care of these housekeeping items while they are fresh in your mind will save you time and money down the road.
Source: Forbes, Divorcing Woman Don’t Forget to Update These Key Documents , Jeff Landers, December 4, 2013