Why marital status matters when designating a beneficiary | Guideline Help Center (2024)

FAQs

Why marital status matters when designating a beneficiary | Guideline Help Center? ›

If you're not married you can choose anyone to be your beneficiary. However, if you're married, or are planning to get married, please be aware that by law, your spouse is your default beneficiary, regardless of who you may have been your beneficiary before getting married.

Your marital status creates specific financial, healthcare, tax, and other shared opportunities and obligations. Here are some of the important ways a change in your marital status can affect your life (and the lives of your family members).

If you are married and your spouse is not named as your sole primary beneficiary, spousal consent is required in the following states of residence, which are community property states: Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington.

If one spouse purchases term life insurance coverage, the other spouse is generally the beneficiary unless another is specified. If there is a beneficiary other than the spouse, the spouse cannot override it. However, they are usually entitled to half the death benefit because the law splits community property in half.

If you are a resident of certain states, you may be required to list your spouse as your primary beneficiary and designate him or her to receive at least 50 percent of the benefit. In some states, you can name someone else with your spouse's written permission.

Literature on health and mortality by marital status has consistently identified that unmarried individuals generally report poorer health and have a higher mortality risk than their married counterparts, with men being particularly affected in this respect.

Marital status is the legally defined marital state. There are several types of marital status: single, married, widowed, divorced, separated and, in certain cases, registered partnership.

In most cases, the account holder can name a beneficiary, whether that's a child, another relative, or someone else other than their spouse.

Does a divorce decree override a named beneficiary? The quick answer is no. Divorce does not usually change a beneficiary designation unless the divorce decree includes a stipulation to change it. Individual retirement accounts (IRAs) work the same way.

An eligible designated beneficiary (EDB) is always an individual. An EDB cannot be a nonperson entity such as a trust, an estate, or a charity, considered not designated beneficiaries. Five categories of EDBs include: Surviving Spouse.

What overrides beneficiaries? ›

The Will will also name beneficiaries who are to receive assets. An executor can override the wishes of these beneficiaries due to their legal duty.

If you have a valid case and strong legal support, you may be able to prove that the beneficiary listed on the policy doesn't accurately reflect the policyholder's wishes when they passed away. Note that regardless of the outcome, the life insurance company will distribute the funds based on the court's orders.

If you own the policy and you're not financially supporting your ex-spouse after the divorce, you can likely remove them as your policy's beneficiary. If you're on the hook for alimony or child support, a judge may require you to keep your ex-spouse as a beneficiary so support continues if you were to die.

The Spouse Is the Automatic Beneficiary for Married People

A federal law, the Employee Retirement Income Security Act (ERISA), governs most pensions and retirement accounts.

Retirement plans

For example, if you are married and you want to designate beneficiaries other than your spouse, you may need written consent from your spouse. Otherwise, retirement plans follow roughly the same guidelines for what is taxable, but other features will vary from plan to plan.

While a spouse doesn't override a designated beneficiary on a bank account, they may be entitled to a portion of the assets in a payable-on-death bank account if those assets are community property.

Married men and married women live, on average, two years longer than their unmarried counterparts. One reason for this longevity benefit is the influence of marital partners on healthy behaviors. Study after study shows that married people eat better and are less likely to smoke and drink excessively.

Tax brackets are different for each filing status, so your income may no longer be taxed at the same rate as when you were single. When you are married and file a joint return, your income is combined — which, in turn, may bump one or both of you into a higher tax bracket.

ResultsThe multilevel analysis by marital status showed that single men had significantly worse QOL (both EQ-VAS and EQ-5D) than married men. On the other hand, the QOL measured by EQ-VAS was better in single women than in married, and separated or divorced women.

Not that a marriage won't work if they have unequal status. But they need longer time to adapt to each other. And sometime different habits can trigger any fight and arguments even misundertanding.