Houston Estate Planning and Elder Law Attorney Blog
Divorce resets more than your day-to-day life. It also rewrites who inherits your money if you die tomorrow. In Texas, beneficiary designations on life insurance, retirement plans, and bank accounts often control who gets paid—sometimes even over your will. You can protect yourself by reviewing every designation and aligning it with your new estate plan.
Why Designations Beat Your Will
When you die, insurers and plan administrators pay whoever is listed on the beneficiary form. They do not read your will first, and they do not guess what you meant. If your ex-spouse still appears on a policy, a payout can slip away from your children or your trust. Texas law revokes some ex-spouse designations automatically, but exceptions and federal plans complicate that rule. Treat each form as if it were a mini-contract that needs a fresh signature.
Prioritize the Big-Ticket Accounts
Start with life insurance, 401(k)s, IRAs, and brokerage accounts, then move to payable-on-death (POD) and transfer-on-death (TOD) designations on bank and investment accounts. Update beneficiary elections for health-savings accounts and deferred compensation, too. For employer plans governed by ERISA, the plan’s rules control; you may need spousal consent if you remarry. Create a checklist and mark each account as you update it so nothing slips through the cracks.
Coordinate With Your Divorce Decree
Your divorce decree and any qualified domestic relations order (QDRO) may require specific beneficiaries or survivor benefits. Follow those orders to the letter to avoid contempt or plan denials. Where the decree is silent, choose new beneficiaries that reflect your goals—often a trust for minor children or a combination of family and charity. If you plan to remarry, consider a prenuptial or postnuptial agreement that clarifies community-property rights in future contributions.
Protect Children and Avoid Court Delays
Do not list minor children directly on insurance or retirement forms. Companies cannot pay a minor without court involvement, and a guardianship will slow access to funds. Name a revocable trust or testamentary trust as beneficiary instead. The trustee can spend on schooling, health care, and housing without asking a judge for permission. Clear instructions keep support flowing when kids need it most.
Update Your Estate Plan and Powers
List new executors, trustees, and agents under your medical and financial powers of attorney. Replace your ex as emergency contact with someone dependable who can act quickly. Adjust your will to reflect changed assets, and confirm that your homestead deed and property-tax records reflect the correct ownership after the divorce. Consistency across documents prevents delays and questions when your fiduciary shows up at the bank.
Timing and Documentation Matter
Change forms as soon as the divorce is final and you have authority to act. Keep dated copies of every submission and confirmation emails from plan providers. Store everything in a secure folder your executor can find. When providers update their online portals, log in to confirm the new names stuck—system glitches happen.
Secure your post-divorce future with designations that reflect your life today. For a fast, thorough review of every account, contact McCulloch & Miller, PLLC at (713) 903-7879 and get step-by-step help from a Houston probate and planning team.