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Changing Beneficiary on IRA During Divorce

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My father in law passed in October 2017.  He was going through a divorce at the time, his wife filed.  He got sick during all of this, the divorce was never made final & his wife even had said at the hospital she saw how bad he was getting & decided to stop divorce so 'she could care for him'.  He also had a lot of money in an IRA.  Money that he earned, money from his family, mineral rights, etc.  

 

Before he passed, he asked for his daughter's SSN & info because he was going to change the beneficiary on his IRA from his wife to his daughter.  The daughter never received word if he actually did change it or not.  She asked the wife & the wife said he had no will but it was agreed the they would leave their belongings to the other (husband & wife).  Well apparantly He did change the beneficiary.  Within a couple of weeks after him passing, his wife learns of the change.  She was upset to say the least & she never mentioned to his daughter that the beneficiary was changed.  She has not released any of his personal property from her house (things that belonged to his family, photos, even his ashes).  She as done NOTHING with the probate.  All of this has been in limbo.  The daughter finds out recently that she was the beneficiary.  Can the wife challenge this?  

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While anyone can challenge anything, I doubt it would be successful, if he completed the change of beneficiary on the IRA.  IRA are not part of his probate estate, unless the estate is named beneficiary.  The daughter should take a copy of the death certificate to the institution where the IRA is located and claim it. If it is a traditional, not a  Roth IRA, they will be income taxes owed on it when she takes the money, unless she chooses to roll it over into a retirement account.

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She can challenge it but she may not have a leg to stand on. Is the daughter a minor or an adult?  No need to open probate when an asset has a named  beneficiary. Assuming she is an adult, she can contact the company directly. Did he retain an attorney for the divorce proceedings?  Did he finalize the divorce?  If not, those belongings should be considered the stepmother’s as his surviving spouse. When people marry, there really isn’t his property and her property, it all becomes their property. His daughter can always retain an attorney to petition for probate but I see that as an uphill battle. She may have to be satisfied with the proceeds from the IRA and consider family heirlooms or a portion of dad’s ashes a lost cause. .

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The daughter is an adult.  So even though they were going through a divorce at the time of his death, that makes the changing of beneficiary legal?  I have read & was told that a spouse can't change beneficiary after someone files & before the divorce is final...   But I also heard that the father had the type of IRA that beneficiary could be changed at any time.  

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1 hour ago, ams said:

Can the wife challenge this?

 

Of course she can.  Whether she has any chance of succeeding depends on the marital property laws of your father-in-law's unidentified state of residence.

 

 

12 minutes ago, ams said:

So even though they were going through a divorce at the time of his death, that makes the changing of beneficiary legal?  I have read & was told that a spouse can't change beneficiary after someone files & before the divorce is final...   But I also heard that the father had the type of IRA that beneficiary could be changed at any time.

 

I can't intelligently comment on what you may have read without reading it myself.  Under federal law (ERISA), certain types of accounts require spousal consent for a beneficiary change (especially if the beneficiary is being changed from the spouse to someone else).  That rule does not apply to IRAs.  The status of the divorce action is not relevant, unless it is relevant under the applicable state law.

 

As far as the rest of your father-in-law's property, if he had no will, his net estate will either pass entirely to his surviving spouse or will be divided between his surviving spouse and surviving child(ren) (again, it depends on the applicable state law).

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1 hour ago, ams said:

This is in Oklahoma.  I have tried looking this up (googling it...) & haven't really got clarification. 

 

Why would YOU need clarification. Who are YOU in this scenario?

 

Not that it matters.

 

The beneficiary was apparently successfully changed. The daughter gets the IRA.

 

The wife didn't stop the divorce to care for him, she stopped because she knew he was going to die and figured she'd get all of the money instead of just half. The old guy outsmarted her. Good for him.

 

 

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No, the wife is only a stepmother..  They had no children together.  She has two from previous marriage  & so does he. 

 

I am very close to the daughter & father & have been part of the family for years.  The father was very good to me & treated me like one of his own.  

 

So are you saying that if the beneficiary couldn't be changed or if the court deemed it couldn't happen, that the investor wouldn't have allowed him to change it?  I hope that makes sense..  

 

And the whole family feels the wife stopped the divorce for monetary purposes rather than "caring for him".  She was there when he passed, she had taken him to a doctors appt, they admitted him to hospital & she was there every day or every other day until he passed away.  Then she went straight from the hospital to his storage building & new house & emptied it of all the paperwork...  I don't understand how people can be that way.  

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6 hours ago, ams said:

So are you saying that if the beneficiary couldn't be changed or if the court deemed it couldn't happen, that the investor wouldn't have allowed him to change it?  I hope that makes sense..  

 

It doesn't, since the beneficiary already HAS been changed to the daughter.

 

6 hours ago, ams said:

Then she went straight from the hospital to his storage building & new house & emptied it of all the paperwork...  I don't understand how people can be that way.  

 

Be what way?

 

A wife owns everything her husband owns. She was still married to him and had every right to do it.

 

 

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7 hours ago, ams said:

So are you saying that if the beneficiary couldn't be changed or if the court deemed it couldn't happen, that the investor wouldn't have allowed him to change it?  I hope that makes sense.

 

I'm not sure I understand this question.

 

The original question was whether the wife can challenge the beneficiary change.  As I previously mentioned, yes, she can challenge it (anyone can challenge anything).  If the IRA $$ hasn't been paid out, then the wife could sue the entity holding the money and the daughter.  If the $$ has already been paid out, then she'd only have a valid claim against the daughter.  She'd have to convince the court that, under Oklahoma's marital property laws, the $$ in the account was marital $$ that she had a right to a share of.

 

If I were the daughter, I'd proceed to get the money and then see what happens.  As for the wife, if this is something she wants to pursue, she'll need legal counsel.

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