Retirement Plan Beneficiary Trumps Divorce Decree

By Amy E. Feldman

PHILADELPHIA (CBS) - When Delaware worker William Kennedy divorced his wife of 22 years, she waived her right to his retirement funds in their divorce decree. But when Mr. Kennedy died years later, DuPont, his former employer, paid more than $400,000 in retirement savings to said ex-wife because he never changed his beneficiary form on the retirement plan which still listed her as beneficiary.

Which leads most of us to two questions: You have $400,000 in a retirement plan? Where can I sign up? And the one I can answer: If the divorce decree says one thing but the beneficiary form says another, which did the Supreme Court just rule takes precedence?

The Supreme Court found that if you listed someone as a beneficiary on your retirement account, that is the person who gets the money after your death. That's true even if you change your will, or even if you get married or divorced.

It may be brutal to check your 401(k) plans right now, but you should do so every time you have a life event to make sure the person who benefits - no matter how small the benefit is in this market - is the one you want.

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