A divorce judgment will allocate assets between the spouses. This property division will address all assets owned by either party or both party without regard to the title prior to the divorce. In many instances the final judgment will allow some or all assets to be allocated to the party who owned the asset prior to divorce. Many of these assets will have contract terms that contain payable on death clauses. Typically these payable on death clauses are paid to the surviving spouse.
After a divorce, each spouse should examine all assets allocated to them and review the payable on death clauses. In particular, life insurance policies, retirement accounts, pensions, investment accounts, and bank accounts should all be examined. If the divorce decree requires death designations then there is a specific duty to conform to the requirements of the judgment. If the decree is silent on death designations then each spouse is free to change the death designations to any person they want. However, if a person still wants to make their ex-spouse the death beneficiary then extra steps must be taken.
Massachusetts law treats any death designation to an ex-spouse as revoked upon divorce. This means that if a person wants their ex-spouse to receive death benefits they must take some action, after divorce judgment issues, to reinstate the death benefit. I recommend that if a person wants their ex-spouse to continue to have death benefits that they state so in a will. In addition, they should notify the trustee of the asset (life insurance company, brokerage firm, bank, etc.) that they are ratifying the death benefit designation. If a person does not write a will after a divorce then they should write their intention in a document that can be signed before a notary public.
If these steps are not taken, then the assets are not likely to be distributed as desired after death. In addition, there is an excellent chance that litigation will be filed to determine who gets the asset after death.
It is strongly recommended that everybody who gets divorced should consult a lawyer and execute a will after the divorce.