Estate Planning After Divorce in Massachusetts — The ERISA Trap and What to Update

Your divorce is final. You assume the court's division of assets handled everything and your ex-spouse is no longer connected to your estate. In Massachusetts, that assumption is partially correct — and the part that is wrong could send your 401k or life insurance payout directly to your ex.

What Massachusetts Automatically Revokes

Under M.G.L. c. 190B, § 2-804, divorce in Massachusetts automatically revokes certain provisions in favor of your former spouse:

• Will bequests. Any gifts to your ex-spouse in your will are treated as if the ex predeceased you. The assets pass to the contingent beneficiaries or under intestacy rules.
• Powers of attorney. Your ex-spouse's authority as your financial or health care agent is automatically revoked.
• Revocable trust provisions. If your revocable trust names your ex as a beneficiary, those provisions are revoked by operation of law.

These automatic revocations happen without you doing anything. But they only apply to documents governed by state law.

The ERISA Gap — What Divorce Does NOT Revoke

Here is the critical gap: employer-sponsored retirement accounts (401ks, 403bs, pensions) and most group life insurance policies are governed by the federal Employee Retirement Income Security Act (ERISA), not Massachusetts state law.

ERISA preempts state law. The U.S. Supreme Court confirmed this in Egelhoff v. Egelhoff (2001): state automatic-revocation statutes like Massachusetts § 2-804 do not override ERISA plan beneficiary designations. If your 401k still names your ex-spouse as the primary beneficiary after your divorce, your ex gets the full account balance when you die — regardless of what your will, your divorce decree, or Massachusetts law says.

This is not a technicality. It happens regularly. A divorced person dies years after the divorce, never having updated their 401k beneficiary form. The plan administrator pays the ex-spouse. The deceased's current partner or children have no legal claim to the funds.

What You Must Update Manually

Within 30 days of your divorce being finalized, review and update:

401k and 403b beneficiary designations. Log into your employer's benefits portal and change the primary and contingent beneficiaries. If your divorce settlement includes a Qualified Domestic Relations Order (QDRO) splitting the account, make sure the remaining balance designates your current intended beneficiary.

Pension survivor benefits. If you are entitled to a pension, verify that the survivor benefit designation reflects your current wishes, not your pre-divorce elections.

Group life insurance. Employer-provided group life insurance is typically ERISA-governed. Change the beneficiary through your HR department or benefits portal.

Individual life insurance. Non-employer policies are governed by state contract law, not ERISA. Massachusetts automatic revocation may apply, but do not rely on it. Change the beneficiary directly with the insurance company to eliminate any ambiguity.

IRA beneficiary designations. IRAs are not ERISA-governed (they are individual accounts, not employer plans), so Massachusetts automatic revocation should apply. But every major financial institution will tell you the same thing: update the form. Do not rely on a state statute when a two-minute form change provides certainty.

Bank account POD designations. If your savings or checking accounts have payable-on-death designations naming your ex, change them.

Update Your Core Estate Documents

Execute a new will. While Massachusetts automatically revokes bequests to your ex, the rest of your old will may be outdated. Your executor appointment, guardian nominations for minor children, and trust provisions all need review.

Execute a new health care proxy. If your ex was your health care agent, that authority was automatically revoked. But you now have no health care agent at all — which means no one has legal authority to make medical decisions for you during incapacity. Massachusetts has no default surrogate decision-making law. Without a proxy, even your current partner or adult children cannot direct your care.

Execute a new durable power of attorney. Same issue: your ex's financial authority was revoked, but you need someone new in that role. Make sure the new document includes the explicit durability clause required under M.G.L. c. 190B, § 5-501.

File a new homestead declaration. If your ex-spouse's name was on the original Declaration of Homestead and the home was awarded to you in the divorce, file a new declaration in your name only to maintain the $1,000,000 creditor protection.

Children and Custody Considerations

If you have minor children, your estate plan must coordinate with your custody arrangement:

• Guardian nominations. Your will should nominate a guardian for your minor children in case you die while they are under 18. Courts prioritize the surviving parent for custody under M.G.L. c. 190B, § 5-202, but a nominated guardian provides a backup if the other parent is unable or unfit.
• Trust for minors. If you leave assets directly to minor children, a court-appointed conservator will manage those assets until the children turn 18. A testamentary trust lets you name a trustee of your choice and set the distribution age (25, 30, or whatever you decide).

The Massachusetts Estate Planning Kit includes a post-divorce estate planning checklist that covers every beneficiary designation, legal document, and filing you need to update.

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