Are Your Beneficiary Designations Protected?

It depends on your state. About 30 states have adopted laws that automatically revoke beneficiary designations to an ex-spouse upon divorce. However, some states only revoke designations in wills, not on life insurance or retirement accounts. ERISA-governed employer plans (like 401k) are not affected by state law and require manual updates.

In community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin), spousal consent is typically required to name a non-spouse beneficiary on retirement accounts funded with community property. For ERISA plans like 401k, federal law requires spousal consent regardless of state.

In most states, no. The Supreme Court ruled in Clark v. Rameker (2014) that inherited IRAs are not protected in bankruptcy. However, about 8 states (Alaska, Arizona, Florida, Idaho, Missouri, North Carolina, Ohio, Texas) have passed laws explicitly protecting inherited IRAs from creditors in state court judgments.

All 50 states have "slayer statutes" that prevent someone who intentionally kills another person from inheriting from their victim. This applies to wills, trusts, life insurance, and beneficiary designations. The killer is treated as having predeceased the victim.

Per stirpes is not the default for beneficiary designations in any state. If your beneficiary dies before you and you haven't named a contingent beneficiary, the proceeds typically go to your estate (and through probate). You must explicitly designate "per stirpes" or name contingent beneficiaries.

ERISA-governed plans (most employer 401k and pension plans) are subject to federal law, not state law. State divorce revocation statutes do not apply to ERISA plans. You must manually update beneficiaries after divorce. However, ERISA does require spousal consent to name a non-spouse primary beneficiary.