Can a spouse override a beneficiary in Cincinnati? The short answer is no. But let’s look at this more closely, so we understand how it works.
When we think of a beneficiary, we generally think of instruments such as life insurance policies. Those always come with the option to designate a beneficiary if you should die. If married, most designate their spouse as the beneficiary. However, most estate planning attorneys can tell you that when couples divorce, sometimes things “fall through the cracks.” Maybe the couple became so embroiled in dividing up assets such as the house, the boat, the lake house, etc., an insurance policy set up long ago might be forgotten. Fast forward, the holder of that policy remarries and, some years later, dies. This is when things get tense. If the ex-spouse was listed as the beneficiary and that was never changed, depending on state law and in some cases federal law, that ex will receive the money. Not the new spouse. So, a word to the wise, when divorcing, make sure all your beneficiary designations are updated to your new circumstances.
So, if you are the “new spouse,” you cannot change the beneficiary. Only the insured can do that.
Some other interesting facts about beneficiaries here in Cincinnati.
- The rules for 401(K)’s are a little different. Generally, you can name anyone as a beneficiary of your 401(K); however, if you are married, your spouse is usually entitled to the assets in your 401 (K). In that case, you can’t choose a different beneficiary unless your spouse waives their inheritance rights. (Again, check with your financial advisor!)
- Rules are also different for IRAs. Best to consult with your financial advisor, but again, if you are divorcing, take that extra step to remove the ex as the beneficiary unless you really want them to have it after you die.
- Last, just as an FYI – there is a way to make sure the beneficiary of your life insurance policy is NEVER changed. You list the beneficiary as an irrevocable beneficiary. That means it cannot be changed, ever. Some parents list their children as irrevocable beneficiaries, for example.
Here in Cincinnati, or anywhere, it is always best to talk to your estate planning attorney and your financial advisor if you are divorcing; to ensure everything is updated. If you don’t, you won’t be the first person to die and leave an ex an unexpected windfall. So feel free to call me at 513-399-7526 or visit my website, www.davidlefton.com, to schedule a consultation to review your estate planning documents to ensure everything is up to date for you.