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Title Tag: Ex-Spouse Beneficiary: What Happens to Your IRA After Divorce (2026) - ProbatePedia
Meta Description: If your IRA or 401(k) still names your ex-spouse as beneficiary, they receive the money when you die — regardless of your divorce decree, your new will, or how many years have passed. The U.S. Supreme Court has ruled on this twice. Here's exactly what happens and what you must do.
Ex-Spouse Beneficiary: What Happens to Your IRA After Divorce (2026)
Last Updated: March 2026 • ERISA, IRC §408, IRC §401• Life Events Series — Article 2 of 6 · CRITICAL
If your retirement account — IRA, 401(k), 403(b), or any employer plan — still names your ex-spouse as beneficiary, your ex-spouse will receive that money when you die. Your divorce decree cannot override this. Your new will cannot override this. Your children's claims cannot override this. This is not a technicality or a gray area: the U.S. Supreme Court ruled in Egelhoff v. Egelhoff (2001) that ERISA — the federal law governing employer retirement plans — preempts state laws that would automatically revoke a beneficiary designation upon divorce. And in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009), the Court reaffirmed that the plan must pay the person named on the beneficiary designation form, regardless of a divorce decree requiring the ex-spouse to waive the benefit. The fix is simple: submit a new beneficiary designation form today. The failure to do so is one of the most costly and irreversible estate planning mistakes in American law. ⚠️ Critical Warning In Kennedy v. Plan Administrator (2009), William Kennedy divorced his wife Liv, and their divorce decree required Liv to waive her rights to his pension. William never updated his beneficiary designation form. He died. The Supreme Court unanimously ruled that the plan administrator must pay Liv — because the written beneficiary designation controlled, and the divorce decree's waiver provision was unenforceable against the ERISA plan. William's estate received nothing. His daughter received nothing. Liv received the entire pension. This is the law.
Which Accounts Are Governed by Which Law?
| ContentGoverning LawContentDoes Divorce Revoke Beneficiary Designation?ContentRisk Level** | | --- | --- | --- | --- | | 401(k), 403(b), 457(b), pension — employer sponsored | ERISA (federal law); ERISA explicitly preempts state divorce law | NO — Egelhoff (2001) settled this definitively for all ERISA plans. State laws purporting to revoke beneficiary designations upon divorce do not apply to ERISA plans. | CRITICAL — update immediately after divorce | | Traditional IRA, Roth IRA | Contract law (IRA custodian agreement) + IRC §408; NOT governed by ERISA | NO — IRAs are not ERISA plans; divorce does not automatically revoke IRA beneficiary designations under federal law or contract law; state law varies — most states do NOT automatically revoke IRA designations upon divorce | CRITICAL — update immediately after divorce | | SEP-IRA, SIMPLE IRA | Contract law + IRC; not ERISA | NO — same analysis as Traditional/Roth IRA | CRITICAL | | Individual / group life insurance — employer ERISA plan | ERISA (group employer life) | NO — same ERISA preemption applies to employer group life insurance plans | CRITICAL — update with HR | | Individual life insurance (non-employer) | State law and insurance contract | DEPENDS on state — Texas revokes upon divorce (Tex. Fam. Code §9.301); most states do NOT automatically revoke; treat as not revoked and update | HIGH — update as a precaution regardless of state | | Bank account POD (Payable on Death) | State law and bank contract | DEPENDS on state — many states have statutes revoking POD designations upon divorce; but not all; do not rely on this | HIGH — update at your bank | | Brokerage account TOD (Transfer on Death) | State law and brokerage contract | DEPENDS on state — same analysis as POD; treat as not revoked | HIGH — update with brokerage | | Annuity | Insurance contract law + state law | Generally NO — treat as not revoked; update immediately | HIGH |
The Supreme Court Cases Every Divorced Person Must Know
Egelhoff v. Egelhoff (2001) — The Foundational Case
David Egelhoff divorced Donna Egelhoff in Washington State. Washington had a state law that automatically revoked beneficiary designations upon divorce. David died two months after the divorce without updating his 401(k) and employer-provided life insurance. Washington's automatic revocation statute would have sent the money to David's children from a prior marriage. But the Supreme Court ruled 7-2 that ERISA preempts Washington's revocation statute — the plans must pay Donna, because she was the named beneficiary. The children received nothing from the 401(k) or group life insurance.
The Lesson from Egelhoff: State Protections You Think You Have May Not Apply to Employer Retirement Plans:
Many states have enacted laws purporting to protect divorced people by automatically revoking beneficiary designations in wills, trusts, and some financial accounts upon divorce. These state laws offer genuine protection for wills, individual bank accounts, and in some states individual life insurance. But for any account governed by ERISA — every 401(k), 403(b), pension, and employer group life insurance plan in America — ERISA is supreme. Your state's automatic revocation statute cannot help you. Only an updated beneficiary designation form can.
Kennedy v. Plan Administrator for DuPont (2009) — The Divorce Decree Is Not Enough
William Kennedy and his wife Liv divorced. Their divorce decree explicitly stated that Liv 'is divested of all right, title, interest, and claim in and to... [William's] retirement plans.' William never submitted a new beneficiary designation form to his DuPont savings plan. He died. His daughter Kari was the executor of his estate and sought the savings plan proceeds. The plan paid Liv — the named beneficiary. The Supreme Court ruled unanimously: the plan administrator must follow the written beneficiary designation; a divorce decree waiver is not enforceable against the plan. Kari received nothing. Liv received everything.
A Divorce Decree Requiring Your Ex to Waive Retirement Benefits Is Not Self-Executing:
Your divorce attorney may have included language in your settlement agreement or decree requiring your ex-spouse to sign a waiver of all retirement benefits. This language is important and enforceable against your ex-spouse in family court — if they refuse to sign a waiver and you are alive, you can take them back to family court. But once you are dead, the plan administrator cannot look beyond the beneficiary designation form. The time to enforce the divorce decree waiver is while you are alive. The only reliable solution is: submit a new beneficiary designation form the day your divorce is final.
What Happens If You Die With Ex-Spouse as Beneficiary — Scenarios
| ContentAccountContentResultContentAmount Lost to Ex-Spouse** | | --- | --- | --- | --- | | Died 3 years after divorce; forgot to update IRA | $450,000 Traditional IRA | Ex-spouse receives entire IRA as surviving beneficiary; inherits as Inherited IRA; 10-year distribution rule applies (if not eligible designated beneficiary) | $450,000 — 100% to ex-spouse | | Died 10 years after divorce; updated will but not 401(k) | $300,000 401(k) | Will is irrelevant to 401(k) distribution; beneficiary designation controls; ex-spouse receives 401(k) proceeds despite new will | $300,000 — 100% to ex-spouse despite new will | | Divorce decree required ex to waive 401(k); no new beneficiary form | $600,000 pension | Kennedy v. Plan Administrator: plan pays ex-spouse; estate/children cannot override; ex-spouse may be liable in family court but money is already paid | Up to $600,000 — ex-spouse receives; estate must sue ex-spouse in family court to recover | | Died during divorce proceedings — decree not yet final | All accounts | Beneficiary designation in effect at death controls; divorce not yet final so no automatic revocation statutes apply; ex-spouse is still legal spouse | All accounts where ex-spouse is named beneficiary |
How to Update Beneficiary Designations — Step by Step
| ContentHow to UpdateContentWhat to DesignateContentWatch For** | | --- | --- | --- | --- | | IRA (at Fidelity, Vanguard, Schwab, etc.) | Log into online account portal → Account Settings → Beneficiaries → Update; OR call custodian; OR visit branch | Primary beneficiary: your children (by name + DOB + SSN), or a new trust, or another person. Also designate contingent (secondary) beneficiaries. | If your children are minors, consider designating a custodian under the Uniform Transfers to Minors Act (UTMA) or a trust as beneficiary — minors cannot directly receive large inheritances | | 401(k) / 403(b) | Contact HR or log into employer benefits portal; submit new beneficiary designation form | Same as IRA — name primary and contingent beneficiaries | Some 401(k) plans require spousal consent to name a non-spouse as primary beneficiary — if you have remarried, get spouse's signature; if not remarried, no spousal consent required | | Life insurance (individual) | Contact your insurance agent or insurance company directly; request change of beneficiary form | Name new primary and contingent beneficiaries | Irrevocable beneficiary designations (rare) require the current beneficiary's consent to change — check if your policy has this feature | | Life insurance (employer group) | Contact HR or benefits portal; submit change of beneficiary form | Name new primary and contingent beneficiaries | ERISA governs — update even if you think state law protects you | | Bank accounts (POD) | Visit branch or use online banking; update TOD/POD beneficiary | New beneficiaries by name and relationship | Some banks require original beneficiary to sign off — not typically required for POD; verify with your bank | | Brokerage accounts (TOD) | Contact brokerage; most offer online update | New beneficiaries by name, DOB, and SSN | If account is in a trust, the trust is the owner — no TOD beneficiary designation needed or available |
Special Situation: What If You Already Died and Ex-Spouse Received the Money?
If a deceased person's estate discovers that an ex-spouse received retirement funds to which they were not contractually entitled — for example, where a divorce decree explicitly required the ex-spouse to waive benefits — the estate may have a claim against the ex-spouse for unjust enrichment or breach of contract. However, the plan administrator cannot reverse the payment, and the ex-spouse may have already spent or transferred the funds. Litigation to recover retirement funds from an ex-spouse is expensive, uncertain, and time-consuming. The only reliable remedy is updating the beneficiary designation while the account owner is alive.
✅ Verified Data — March 2026
• Egelhoff v. Egelhoff, 532 U.S. 141 (2001): ERISA preempts state divorce automatic revocation statutes for employer plans — confirmed
• Kennedy v. Plan Administrator for DuPont, 555 U.S. 285 (2009): plan must pay named beneficiary despite divorce decree waiver — confirmed
• ERISA §514(a): express preemption of state laws that 'relate to' employee benefit plans — confirmed
• IRA not an ERISA plan: IRC §408 governs IRAs; ERISA preemption does not apply but IRAs have no auto-revocation protection in most states — confirmed
• Texas Fam. Code §9.301: revokes life insurance beneficiary designations upon divorce for individual policies in TX — confirmed
• Spousal consent for non-spouse 401(k) beneficiary: ERISA §205; only required if participant is currently married — confirmed
Life Events Estate Planning Series:
LE-1 → Estate Planning After Divorce: 7 Things to Update Immediately
LE-2 → Ex-Spouse Beneficiary: What Happens to Your IRA After Divorce
LE-3 → Blended Family Estate Planning: Protecting Both Spouses and All Children
LE-4 → QTIP Trust: How to Protect Your Current Spouse and Your Children
LE-5 → Unmarried Partner Estate Planning: 6 Documents You Must Have
LE-6 → Estate Planning After Your Spouse Dies: What to Do in the First Year
probatepedia.com · /estate-planning/ex-spouse-beneficiary-ira-divorce/ · LE-2 of 6 · v1.0 March 2026