The U.S. Supreme Court Has Spoken: When State Laws Do Remove Ex-Spouses as Beneficiaries, and When They Don’t

After a divorce, many people walk away with a big assumption:

“Once we’re divorced, my ex has automatically removed from everything.”

It feels reasonable. 

Divorce ends the relationship. 

Paperwork is signed. 

Assets are divided. 

Surely the law cleans up the rest.

Sometimes it does.

Sometimes it very clearly does not.

Over the past several decades, the U.S. Supreme Court has been asked to clarify exactly what happens to beneficiary designations after divorce. The Court’s rulings have drawn a firm, and often misunderstood, line between what state law can change and what it cannot.

When you’re in a situation like this, understanding that line matters. Like, a lot.

The consequences don’t just show up on a piece of paper. They show up in real families, real inheritances, and real retirement income.

Why This Question Even Exists

Beneficiary designations sit at the intersection of three different legal systems:

• State family and estate law
• Federal benefit law
• Contract law governing financial accounts

That overlap creates a decent amount of confusion, especially after divorce.

Most people assume a divorce decree controls everything. In reality, beneficiary designations often operate outside the divorce process. They’re contracts between the account owner and the institution, and unless something legally overrides them, they’ll remain in force.

States recognized long ago that this caused problems. People would divorce, forget to update beneficiaries, and unintentionally leave assets to ex-spouses years later.

To address that problem, many states enacted what are known as revocation-on-divorce statutes.

What Revocation-on-Divorce Laws Are Designed to Do

Revocation-on-divorce laws are based on a simple idea: most people do not intend for an ex-spouse to remain a beneficiary after divorce.

Rather than requiring everyone to update every account immediately, these laws step in automatically. Once a divorce is finalized, the law treats the ex-spouse as having been removed as beneficiary, unless the account owner later reaffirms that choice.

These statutes are not about punishment or redistribution. They are about presumed intent.

And for years, courts debated whether these states had the authority to do this.

What the Supreme Court Confirmed

In a key 2018 decision, the Supreme Court made its position clear:
State revocation-on-divorce laws are constitutional when applied to accounts governed by state law.

In practical terms, this means states may assume that divorce changes intent and can legally remove an ex-spouse as a beneficiary on certain accounts if no action is taken after divorce.

This was an important ruling. It validated decades of state law and provided clarity for families and courts alike.

But it came with a crucial limitation.

Where State Law Does Work

After the Supreme Court’s ruling, state revocation-on-divorce statutes generally apply to accounts that are not governed by federal law.

In those cases, if a person divorces and later dies without updating their beneficiary designations, state law may automatically treat the ex-spouse as removed.

This often applies to:

Life insurance policies issued under state law
Individual Retirement Accounts (IRAs)
Payable-on-death bank accounts
Transfer-on-death brokerage accounts
Certain annuities

In these situations, the law essentially says:
“If you wanted your ex-spouse to remain the beneficiary, you would have said so after the divorce.”

Many people assume this rule applies universally. Frankly, it kind of sounds right.

But that assumption is where the trouble begins.

The Line the Supreme Court Drew

The Supreme Court was equally clear about what state law cannot control.

State revocation-on-divorce laws do not override federal law.

If a benefit or account is governed by federal statute, federal rules win. Period.

This is not a technical nuance. It’s a foundational principle of U.S. law known as federal preemption.

Which changes everything.

Social Security: Completely Outside State Control

No benefit illustrates more clearly than Social Security.

Social Security is a federal program. States have no authority over eligibility, benefit amounts, or claiming rights, including benefits tied to former spouses.

Which means:

A state law cannot remove an ex-spouse’s right to claim Social Security.
A divorce decree cannot waive Social Security rights in a binding way.
A revocation-on-divorce statute does not apply.

If you were married for at least 10 years, your ex-spouse may still be eligible for divorced-spouse or survivor benefits, regardless of what your divorce agreement says.

This surprises people. And it often causes resentment.

The Supreme Court has made clear that Social Security follows only federal rules. State assumptions about intent simply don’t matter here.

Why Divorce Decrees Don’t Control Social Security

Many divorce agreements include language stating that each spouse waives rights to the other’s retirement benefits. That language may work for pensions or investment accounts, but not for Social Security.

How can that be?

Because Social Security is not treated as a marital asset. It’s a federal entitlement tied to earnings history, not property division.

The Supreme Court has consistently held that states cannot interfere with this structure. Even a carefully drafted divorce decree cannot strip someone of federally granted eligibility.

That’s why an ex-spouse can sometimes receive Social Security benefits even when every other financial tie has been severed.

Employer Retirement Plans: Another Exception

Employer retirement plans, such as 401(k)s, introduce a different kind of complexity.

These plans are governed by ERISA, a federal law that sets strict rules for plan administrators. Under Supreme Court precedent, plan administrators must follow the beneficiary designation on file, even if it conflicts with a divorce decree or state law.

This has led to painful outcomes.

If a divorce occurs and the beneficiary designation is never updated, the ex-spouse may legally receive the account, even if state law would otherwise revoke the ex-spouse's rights and even if the divorce decree says otherwise.

The Court’s reasoning is simple: plan administrators need clear, uniform rules. They are not required to interpret divorce documents. They follow the form.

One Divorce, Very Different Outcomes

This is where confusion becomes reality.

After the same divorce:

A life insurance policy may automatically remove an ex-spouse
An IRA beneficiary may be revoked by state law
A 401(k) beneficiary may remain unchanged
A Social Security ex-spouse benefit may remain fully intact

Same people.
Same divorce.
Four different legal outcomes.

The Supreme Court didn’t create this complexity, and has clearly affirmed it.

The Human Cost of Misunderstanding

These rules aren’t merely technical. They affect real people, often at the worst possible time.

It’s not uncommon for a surviving spouse to be caught completely off guard when they discover that:

• A former spouse is entitled to a survivor benefit.
• An ex-spouse is still listed as the beneficiary on a retirement account.
• A divorce agreement didn’t actually do what they thought it did.

The frustration that follows usually isn’t about the law itself.

It’s about expectations.

Most people assume that divorce ties up loose ends. Once papers are signed, everything is clean and settled. In reality, that’s often not the case, and when those assumptions collide with reality, trust takes a hit. Trust in the system. Trust in the advice they were given. And sometimes, trust within the family itself.

What the Supreme Court’s Rulings Really Mean

The Court has drawn a clear framework:

State law can presume intent and revoke a beneficiary's rights when the account is state-governed.
Federal benefits and federally governed plans follow federal rules, regardless of state law or divorce language.

This isn’t arbitrary. It’s about legal authority.

But it places the burden squarely on individuals to act intentionally.

The Only Safe Assumption

Here’s the uncomfortable truth:

Divorce does not reliably update beneficiaries for you.

Some changes happen automatically.
Some never happen at all.
And Social Security ignores state law entirely.

The only safe approach is coordination:

• Review beneficiaries immediately after divorce.
• Understand which accounts follow state law and which don’t
• Never assume a divorce decree controls federal benefits.

The Supreme Court has made one thing abundantly clear: assumptions are dangerous.

Final Thought

State laws removing ex-spouses as beneficiaries do work, and the Supreme Court says so.

They just don’t work everywhere.

And when federal law applies, it always wins.

That’s why retirement and estate planning after divorce isn’t just about dividing assets. It’s about understanding which rules apply, which don’t, and where human assumptions quietly fail.

Because the most painful surprises aren’t caused by bad intentions, they’re caused by misunderstood rules.

Looking for a financial partner that can guide you through a situation like this or similar situations? We’d love to hear from you!