PART 2 – MARRIAGE, DIVORCE, AND ESTATE PLANNING

Contributors: Joy N. Burditt, CISP, ALMI, ACS – VP Operations; Peggy von Kaufman, CISP, ALMI, ACS – VP Operations; Brooke Gullion, CISP, FLMI, ACS, ARA – AVP Operations; Zachary Trevino, FLMI, ACS, ARA – AVP Operations

Life Changes: Update Your Beneficiaries
Your beneficiary designations should reflect life changes. In Part 2, we explore how marriage, divorce, and estate planning decisions affect who receives your benefits.

Marriage: Spousal Consent
In community property states like Texas, naming someone other than your spouse as the primary beneficiary on a qualified annuity (IRA, Roth IRA, SEP-IRA) usually requires written spousal consent. Document any split percentages and keep signed consent on file. Review after major life events.

Divorce: Updates Required
Divorce decrees may award benefits to an ex-spouse or require them to remain a beneficiary temporarily. Submit the finalized decree and updated beneficiary forms promptly. In Texas, if an ex-spouse is not re-designated after divorce, they are treated as predeceased for beneficiary purposes.

Naming Your Estate
Naming your Estate (or defaulting to it) requires probate, which can be time-consuming and costly. Required documents include a certified death certificate and Probate Document (e.g., Letters Testamentary). Estate claims often take longer and may have different tax implications—consult a tax advisor.

Common Mistakes

• Not naming backup beneficiaries.
• Using vague terms instead of full legal names.
• Assuming Per Stirpes is automatic.
• Naming minors without a trust/custodian.
• Ignoring spousal consent rules in community property states.

Quick Checklist

• Review after marriage, divorce, births, deaths, or when minors reach adulthood.
• Keep copies of spousal consent and court orders.
• Ensure 100% allocation at all beneficiary levels and specify Per Capita or Per Stirpes.
• Keep your Last Will and Testament current if naming your Estate.

Disclaimer: This article is for educational purposes and is not legal or tax advice. Consult your own attorney or Qualified Tax Advisor for guidance.

Quick Tips After Major Life Events

• Marriage or divorce does not automatically update your beneficiary designation.
• Court documents do not replace required beneficiary forms.
• Naming an Estate can delay payment and require probate.
• Review and update beneficiaries after every major life change.