Over the past several weeks I have had occasion to address an all too common circumstance surrounding surprise beneficiary designations. Unfortunately, these "suprises" usually only become known at the death of the account owner when the surviving spouse or children seek to claim benefits they were expecting, only to discover that the beneficiary designation contains a different name from what was expected. Unfortunately, these surprises often turn into family disputes, often between the decedent's children and their step-parent, the decedent's 2nd spouse. These types of disputs usually take one of three common themes:  (1) the decedent executed the beneficiary form many years prior and had simply forgotten or did not realize the need to change his designation following a change in his circumstance; or (2) the decedent remarried subsequent to filling out the beneficiary form, often giving legal intervening rights to the surviving spouse that the decedent may not have even known existed; or (3) the decedent named his then spouse as beneficiary and later divorced, but forgot to execute a new beneficiary form after the divorce naming new beneficiaries.  To add to the confusion, spouses are given priority rights as beneficiaries to some plans, like 401(k) plans, which rely on federal ERISA law, but hold completely different rights, or no rights at all, under other types of plans, such as IRA''s or 403(b)'s, which are not governed by ERISA. 

Sadly, all of this confusion and conflict can be avoided through simple planning.   Everyone should periodically reviewed their beneficiary designations, and if there is any doubt, simply file a new designation of beneficiary. This is the only way to ensure with certainty of the decedent's wishes are carried out, and completely avoid unnecessary disputes between family members.  Over the past several years, our office has been able to help many spouses receive the retirement benefits to which they were legally entitled, albeit at a heavy price of family harmony.  The families would have been far better off had these matters been directly addressed by the account owner before death.