A:

The rules vary among retirement benefits. In some cases, because you are the current spouse, you will be treated as the beneficiary by default. This would be so even if your spouse named someone else as the beneficiary. However, a named beneficiary may challenge the default provisions, resulting in costly legal fees and a delay in your receipt of the inherited assets.

To clear up any doubts, your spouse should check with his plan's administrator about the rules that apply to their benefits. For starters, you should ensure that your spouse updates all documents to reflect any changes to beneficiary designations. They should also ask for written confirmation that the changes were made. Or, if no change is necessary, your spouse can provide a written confirmation of the current beneficiaries on record. Cases of "lost" documentation - including changes in beneficiary designations - are all too common. Usually, no one realizes these documents are lost until they're needed to determine proper allocation or disbursement of assets to beneficiaries.

For related reading, see Getting A Divorce?: Understand The Rules Of Dividing Plan Assets and Marriage, Divorce And The Dotted Line.

This question was answered by Denise Appleby
(
Contact Denise)

RELATED FAQS
  1. My uncle died recently. He designated my mother and father as his beneficiaries in ...

    It depends. If the retirement plan is a qualified plan, then the plan administrator would refer to the plan document to determine ... Read Answer >>
  2. Can the non-spouse beneficiary of an IRA name a successor beneficiary?

    Whether the beneficiary of an individual retirement account (IRA) can name a successor beneficiary (second generation beneficiary) ... Read Answer >>
  3. If both the primary and contingent beneficiaries are unavailable, what happens to ...

    Understand the difference between primary and contingent beneficiaries and what happens to assets when neither are present ... Read Answer >>
  4. If a trust is named as the beneficiary of an IRA, can the trustee of that trust become ...

    While the IRA owner is alive, only the IRA owner can change the designated beneficiary of the IRA. Exceptions may apply if ... Read Answer >>
  5. My mother inherited my father's IRA. When she died, I received an account application ...

    If your brother cannot be found, you may want to check with the IRA custodian and/or the financial advisor to find out if ... Read Answer >>
  6. What does U.S. law say about contingent beneficiaries?

    Learn about regulations the United States has on the naming of contingent beneficiaries, the types of contingencies that ... Read Answer >>
Related Articles
  1. Options & Futures

    An Estate Planning Must: Update Your Beneficiaries

    Life changes make it time to rewrite your plan's designations.
  2. Retirement

    The Complete Guide To Retirement Planning For 50-Somethings: Beneficiary and Estate Planning

    Beneficiary DesignationsIt is possible that you will not spend all of the funds that you save in your retirement nest egg. As such, you should make plans to ensure proper disposal of those assets, ...
  3. Retirement

    Retirement Planning For 20-Somethings: Incorporating Lifecycles In Your Planning

    Inevitably, life changes will occur that necessitate modifications to your retirement planning strategies. Ignoring these changes can negatively impact your retirement planning, and could be ...
  4. Insurance

    Who is a Beneficiary?

    A beneficiary is a person or entity that receives funds, assets, property or other benefits from a trust, will, or life insurance policy.
  5. Financial Advisors

    How to Handle Client Beneficiary Designations

    Beneficiary designations are a critical financial planning step that can be easily overlooked. Here's how to ensure they are properly done.
  6. Savings

    529 Plans: Eligibility

    By Denise Appleby Who Can Establish and Contribute to the 529 Plan?Anyone can establish and contribute to a 529 plan on behalf of a designated beneficiary. This means that relatives, family, ...
  7. Retirement

    3 Deadlines For Retirement Plan Beneficiaries

    To take full advantage of new RMD regulations, beneficiaries need to take action before important deadlines.
  8. Retirement

    10 Estate Planning Tips For Women

    Estate planning is important for women because they often live longer than men and tend to make less money on average.
  9. Your Clients

    Top Estate Planning Beneficiary Mistakes to Avoid

    Asset transfer can be fraught with twists, but adhering to a few practical procedures can go a long way in navigating these potentially choppy waters.
  10. Retirement

    Retirement Planning for the Non-Employed Spouse

    A stay-at-home spouse probably racks up more hours working than any office jockey. Make sure he or she is set up to save for retirement, as well.
RELATED TERMS
  1. Primary Beneficiary

    A beneficiary in a will, trust or insurance policy that is first ...
  2. Alternate Beneficiary

    In a will, an alternate beneficiary is usually named in case ...
  3. Contingent Beneficiary

    1. A beneficiary specified by an insurance contract holder who ...
  4. Non-Spouse Beneficiary Rollover

    A retirement plan asset rollover performed in the event of the ...
  5. Discretionary Beneficiary

    Discretionary beneficiaries are those named in a trust or similar ...
  6. Life Estate

    A type of estate that only lasts for the lifetime of the beneficiary. ...
Trading Center