What is the effect of divorce when your spouse is a beneficiary?

When you get married, you’re probably not thinking about divorce and how it will impact you. Even when divorce becomes necessary, it’s hard to wrap your head around all the issues with which you’ll be presented. But it’s important to cover all your bases, to ensure you don’t get surprised down the road.

Revocation upon divorce

It’s very common for someone to name their spouse as their beneficiary, in any number of documents. Take your will, for example. California recognizes that people may inherently forget to update their will following a divorce, even if they no longer want their ex-spouse to be listed as a beneficiary. Revocation upon divorce is a law which covers you if you do forget. It automatically revokes your ex-spouse’s status, as beneficiary in your will, as soon as the divorce is finalized.

Revocation upon divorce does not work for everything, however. If you have a life insurance policy naming your ex-spouse as beneficiary, the law does nothing to change the designation. Should the designation remain, and should you pass away unexpectedly, your ex-spouse is still entitled to the proceeds. Other things which have survivor designations, such as IRAs or retirement accounts, are similarly unaffected. Although they will likely be dealt with during the divorce proceedings, the ex-spouse can remain as the beneficiary.

Fortunately, you do have options while you’re going through the divorce. The divorce agreement itself can include language which revokes certain beneficiary designations, covering you where the law does not do so automatically. It’s important to speak to an experience professional, who knows California divorce law well, so that you can anticipate the problems you don’t think of yourself.