Definition Beneficiary - a person who benefits from another’s act or action, such as a will, insurance, and annuity.
Application in Divorce At the time of divorce, many spouses will either draft a will or amend an existing will, because he or she no longer desires to have an ex-spouse as a beneficiary of any assets. It is very important to notify all retirement account administrators and insurance companies regarding the divorce, so new beneficiaries can be elected. Postponing this will be disastrous if an untimely death does occur.

In child support orders, the payor will often take out a life insurance policy, naming the child(ren) as the beneficiaries. This financially protects the child(ren) if he or she dies before they reach the age of majority. Some states make this mandatory, if the payor is insurable.

The above child-support scenario can also be easily applied to any spousal support order to achieve similar financial protection.

Upon divorce, the property distribution award can often include one spouse getting a portion of another spouse’s retirement account. This does not occur until the plan holder reaches the age of retirement according the plan, so receiving this asset is postponed to the future. As with many plans, the alternate payee will not receive any portion when the plan holder dies. This being said, it can be a significant risk if proper life insurance is not taken out with the alternate payee as the beneficiary.

Don't Forget to Visit Our Online Support Community

Questions & Answers
Helpful Tips & Facts
  1. You Should Have a Will
    This is typically not the first thing on anybody’s want list, but yet it always seems to loom in the back of one’s mind. Do yourself a favor, especially if you have children, and draft and execute a will. Many spouses, while married, will have some kind of estate planning involving a will, but let it be known that once divorced, the will in place becomes null and void. Most divorce lawyers provide his or her clients with a "do to list" for once the divorce is finalized and one of the first things on this list is revisiting or creating a new will.
  2. When a Parent Remarries
    Perhaps the newly divorced parent remarries. The parent may unintentionally disinherit a child, as without legal documentation to indicate otherwise, a spouse is generally entitled to one half of the deceased spouse’s estate. The divorced parent may desire to leave assets to care for both the new spouse, and the children. In such a situation it may be very important for the parent to sit down with a financial advisor or their estate planning attorney to assess their options. An easy solution is the use of additional life insurance to assist the parent in their wishes to provide for both the care of minor children and the new spouse. Term insurance can be a low-cost solution to provide these benefits until the children reach adulthood, assuming the parent is insurable.
  3. Don’t Forget to Update Your Beneficiaries!
    It’s happens more than you think.... you get divorced and you forget to change the beneficiary designations on your retirement plan (IRA / 401k) or your life insurance policy. Years later when you pass away, your ex-spouse could get all the benefits... even if you had remarried; even if you wanted the children to get it. Keep in mind, your divorce decree may state that the beneficiary will be changed, but you still need to contact the financial institution and follow their rules to change the beneficiary. This will prevent any problems down the road. Also, don’t be too quick to make the changes when you are just separated... you may have to wait until the divorce is final.
Additional Resources
The Discount Divorce Bookstore Discounts
Visit the Original Online Divorce Bookstore for quick and easy access to quality books, manuals, divorce forms, software and other divorce related products. The store delivers you these products in a confidential and secure fashion with excellent customer satisfaction. All of our products are in stock and are shipped to you within one business day of the order by U.S. Priority Mail. Help Us - Help You.

Browse the Store Categories...

Books We Publish Child Support Children and Divorce
Custody & Visitation Divorce (General) Do It Yourself Divorce
Domestic Abuse Friendly Divorce Grandparent’s Rights
Infidelity Mediation Men Only
Military Divorce Property and Financial Aspects Recovery From Divorce
Religion and Spirituality Saving Marriage Separation
Women Only
Find Divorce Professionals We have an ever-growing list of divorce professionals that contribute to DivorceDex.com. To view a list of professionals in your area, please select your state:
ALERT: If you are a divorce professional (attorney, mediator, counselor, financial planner, etc.) generating new clients by joining the directory is easy and free.

FastFacts
#117: If you are not the primary breadwinner of the marriage and have limited understanding of the finances, it is suggested that you consult with an accountant as well as a lawyer to aid in the discovery process of your divorce.
FastFact Sponsor
QdroDesk.com
Advertisement QdroDesk
QDRO Preparation - QdroDesk™ is an industry proven online service providing an instant, easy, accurate, and affordable method for obtaining Qualified Domestic Relations Orders (QDROs).
Advertisement 123DivorceMe
Online Divorce - With or without children, 123DivorceMe.com is the fastest, easiest, and most affordable way to file your own uncontested divorce.
Advertisement Parenting Through Divorce
Online Parenting Class - Avoid the hassle of completing the mandatory course by taking the "Positive Parenting Through Divorce" class online.