Update Beneficiaries After Divorce in Colorado: The ERISA Trap

Colorado has a statute that automatically revokes your ex-spouse as beneficiary on wills, trusts, and individual life insurance the moment your divorce decree is entered. Most people stop there, assuming everything is covered. It is not — and the gap can cost your family six figures.

What Colorado's Auto-Revocation Actually Covers

Under C.R.S. § 15-11-804, a final Decree of Dissolution automatically revokes your ex-spouse from:

• Wills and revocable trusts
• Individual life insurance policies you purchased directly
• Payable-on-Death (POD) and Transfer-on-Death (TOD) accounts
• Powers of attorney

The statute also revokes designations for your ex's relatives and converts any joint tenancy with right of survivorship into a tenancy in common.

What It Misses: Employer-Sponsored Plans

The auto-revocation statute does not apply to employer-sponsored benefits governed by the federal Employee Retirement Income Security Act (ERISA):

• 401(k) and 403(b) accounts — the retirement plan your employer offers
• Group life insurance — the coverage your job provides as a benefit
• Employer pension plans — defined benefit plans through your company

ERISA preempts state law. Period. The U.S. Supreme Court established this in Egelhoff v. Egelhoff, and the Colorado Court of Appeals reinforced it in Ragan v. Ragan (2021 COA 75). If you die without physically submitting a new beneficiary form to your employer's HR department, the plan administrator must pay benefits to the person named on the form — even if that person is your ex-spouse.

The Ragan ruling went further: it held that your estate cannot sue your ex-spouse to recover those funds after distribution. There is no legal recourse.

The Account-by-Account Checklist

Update these accounts immediately after your decree is entered:

Must update manually (ERISA-governed):

• Employer 401(k) or 403(b) → HR department or plan portal
• Group life insurance → HR department beneficiary form
• Employer pension → plan administrator

Already auto-revoked by C.R.S. § 15-11-804 (but update anyway):

• Individual life insurance → insurer
• IRAs and Roth IRAs → custodian (Fidelity, Vanguard, Schwab)
• POD/TOD bank accounts → branch or online banking
• Annuities → issuing company

Even where the auto-revocation applies, submitting new forms eliminates ambiguity. A named beneficiary on a signed form is clearer than relying on a statutory default.

Timing

Do this the same week your decree is entered. There is no waiting period, no grace period, and no excuse that will hold up in court. ERISA's beneficiary form controls from the moment you die — if your form still names your ex, they get the payout.

For 401(k) accounts also subject to a QDRO (splitting the account between spouses), the beneficiary update happens after the QDRO is processed. But group life insurance has no QDRO process — it only has a beneficiary form that needs to change now.

The Colorado After-Divorce Checklist includes a beneficiary audit worksheet covering every account type, contact information, and completion tracking.

See more Colorado guides →