Advisers have another reason to remind clients to review their beneficiary designations on various accounts: The U.S. Supreme Court has ruled that they can outlast divorce for certain benefits. In the case of Hillman v. Maretta, the court ruled that a decedent's ex-wife was entitled to receive his federal life insurance benefits even though he'd remarried, since his ex-wife was still named as his beneficiary. The court found that federal law on the issue pre-empted a conflicting state law that would have awarded benefits to the decedent's current spouse. The writer cautions that the ruling is limited: It's unclear whether it would apply to retirement plans such as IRAs when there aren't conflicting state and federal laws.
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