Once a couple divorces, they often want to move on with their lives and end all connection with the person they once called husband or wife, especially if the divorce was a contentious one. This typically includes removing their ex-spouse as a beneficiary from all assets. Since removal of an ex-spouse is not automatic in all states or for every type of asset, it's best to initiate the process yourself. Although rules differ between states, there are some general guidelines to follow.
Removing a former spouse as the beneficiary of your checking, savings, investment or other banking account is often a relatively easy process. In fact, financial institutions routinely provide forms for this specific purpose. Simply visit your bank and inform it of your decision. Typically, the bank will have you complete paperwork explicitly removing your ex-spouse as beneficiary and designating a new one. Be prepared to provide the new beneficiary's relevant identifying information, such as name, date of birth, Social Security number, relationship to you and contact details.
Life Insurance Policies
In many states, a former spouse is not automatically removed as the beneficiary of a life insurance policy upon divorce. Therefore, to ensure your ex-spouse does not receive the proceeds from your life insurance policy, remove your ex-spouse's name from the policy. In general, this requires contacting your insurance provider and completing the necessary forms to explicitly remove your old beneficiary from the policy and name a new one. Be prepared to provide your new beneficiary's identification details, such as name, date of birth and Social Security number.
Many jurisdictions treat a divorced spouse as having predeceased you. This means that courts will pretend that your spouse is dead for the purpose of distributing your assets. Some jurisdictions consider a new marriage to invalidate all or portions of a will. To ensure your ex-spouse does not inadvertently inherit under your will, revise the offending portions or draft a new will altogether. If you're only removing your ex-spouse as a beneficiary, executing a codicil may be your best option as these are typically used when only minor changes to a will are being made. A codicil is a written amendment to a pre-existing will; to be effective, it must refer to the original will and be signed, dated and witnessed. However, if you anticipate making substantially more changes to your will, such as adding a new beneficiary or changing distribution schemes, it's advisable to revoke your will altogether and draft a new one. You may revoke your will by physically destroying it or creating a new will and including language that explicitly revokes all prior wills.
Trust distributions to a former spouse are not automatically revoked in many states. If you created a living trust or revocable trust, you may amend or revoke it to ensure your ex-spouse is removed as a beneficiary. If your trust provides instructions for how to do so, follow those guidelines. If not, follow the rules established by state law. If your trust is irrevocable, removing your ex-spouse as a beneficiary may prove to be more of a challenge; irrevocable trusts, by their very nature, may not be amended or revoked. However, it is not impossible. Review the terms of the trust or state law to determine what procedure you must follow.