401(k) participants who are married have their spouse as the automatic primary beneficiary. In the event of a divorce, assets like 401(k) accounts are usually divided through a qualified domestic relations order. IRAs, on the other hand, are separate property and can be left to anyone without spousal consent.

401(k)s and IRAs may be part of the augmented estate in some states, entitling surviving spouses to a share of the deceased spouse’s assets. Laws regarding these accounts can vary by state, and the process of updating beneficiaries can have significant implications for inheritance and tax consequences. It’s important to understand the rules in your jurisdiction.

In the case of divorce, updating beneficiary forms for retirement accounts like IRAs is crucial to avoid unintended consequences. Different states have varying laws regarding spousal rights to retirement assets, so it’s important to seek legal advice to navigate the complexities of estate planning and inheritance. Be proactive in updating beneficiaries to protect your assets and ensure your wishes are carried out.

Read more at Yahoo Finance: Will your spouse automatically inherit your 401(k)?