The Supreme Court of the United States recently upheld a state court decision involving the revocation of a beneficiary designation.
A Minnesota resident forgot to update his beneficiary designation forms after he went through a divorce. Minnesota has a law that says any revocable beneficiary designations are automatically revoked if a former spouse is named, and the former spouse was not re-designated as a beneficiary after the divorce.
This policy owner still had his now former spouse as the primary beneficiary and his two children from his first marriage as contingent beneficiaries. When he died, they all made a claim to the policy proceeds.
After a long and expensive battle, the kids won. However, the lesson here is to make sure you do a beneficiary review at least once per year and every time you experience a life changing event such as birth, death, divorce, etc.
Your retirement distribution specialist can even help you with beneficiary reviews if you are unsure what to do or how to properly designate beneficiaries, so your intended beneficiaries aren’t faced with a similar headache.
Source: Sveen v. Melin, 138 S. Ct. 1815, 1823 (2018)
