How to Update Beneficiaries After Divorce in Montana

Montana Revokes Some Beneficiary Designations Automatically

Under MCA § 72-2-814, a Montana divorce automatically revokes certain beneficiary designations and fiduciary appointments that favored your former spouse. This applies to revocable nonprobate transfers — including transfer-on-death deeds, trust provisions, and payable-on-death bank account designations — as well as appointments like executor, personal representative, or power of attorney.

In theory, this statute protects you if you forget to update something. In practice, it has a massive hole.

The Federal Preemption Trap

Montana's revocation statute does not apply to plans governed by federal law. Employer-sponsored 401(k) plans, federal pensions, and Servicemembers' Group Life Insurance (SGLI) are all governed by ERISA or other federal statutes that preempt state law.

The U.S. Supreme Court made this painfully clear in Hillman v. Maretta: if you die without updating the beneficiary designation on a federally governed 401(k), the funds go to your ex-spouse — regardless of what Montana law says, regardless of what your divorce decree orders.

This isn't a theoretical risk. Plan administrators process beneficiary claims based on their records, not on state court orders. If the form still says your ex-spouse's name, the check goes to your ex-spouse.

What You Must Update Manually

Life Insurance Policies

Contact every life insurance company — employer group policies, private term policies, whole life, and any policies you may have forgotten about. Request a new beneficiary designation form, complete it with your updated beneficiaries, and get written confirmation that the change has been processed.

If your divorce decree requires you to maintain a policy naming your ex-spouse (common when there are minor children or ongoing support obligations), keep that designation in place for the required coverage amount but verify you're compliant with the decree's specific terms.

Employer Retirement Accounts

Log into your 401(k), 403(b), or pension plan portal and update the beneficiary designation online, or request a paper form from HR. These are ERISA-governed plans where Montana's automatic revocation does not apply.

Bank and Brokerage Accounts

Update payable-on-death (POD) designations on bank accounts and transfer-on-death (TOD) designations on brokerage and investment accounts. While Montana's statute may revoke these automatically, financial institutions don't always know about your divorce. Updating the records directly eliminates any ambiguity.

IRAs

Traditional and Roth IRAs held at custodians like Fidelity, Schwab, or Vanguard need manual beneficiary updates. Contact the custodian and submit a new designation form.

What Montana's Statute Does Cover

MCA § 72-2-814 handles state-level instruments. If you have:

• A will naming your ex-spouse as executor or beneficiary — the divorce revokes those provisions automatically (but you should still rewrite the will)
• A revocable living trust naming your ex-spouse — those provisions are revoked
• A transfer-on-death deed on Montana real property — the ex-spouse's interest is revoked
• A financial or healthcare power of attorney naming your ex-spouse — those appointments are revoked

Even though the statute covers these, don't rely on automatic revocation alone. Third parties (banks, title companies, healthcare providers) work from the documents they have on file. If your old will or old POA still names your ex, it creates confusion, delays, and potential legal challenges.

The Recommended Audit

Go through every account, policy, and legal document you own and check the beneficiary designation or fiduciary appointment:

1. Life insurance (all policies — group and individual)
2. 401(k), 403(b), pension plans
3. IRA accounts
4. Bank accounts (checking, savings, CDs) — POD designations
5. Brokerage accounts — TOD designations
6. Will
7. Revocable trust
8. Healthcare power of attorney / advance directive
9. Financial power of attorney
10. Transfer-on-death deeds

The Montana After-Divorce Checklist includes a beneficiary audit tracker that walks through every account type, flags which ones are protected by Montana's statute and which need manual updates, and tracks confirmation dates.

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