Aflac Estate Planning Alert: The Costly Mistake That Could Leave Assets to an Ex

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'Aflac employees should remember that updating a will is only part of the divorce process—beneficiary designations and trusts must also be reviewed to keep estate plans aligned with their intentions.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Aflac employees often underestimate how quickly outdated beneficiary designations can unravel even the best estate plans, making regular reviews after major life events essential.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. Why wills alone may not be sufficient in estate planning after divorce.

2. How outdated beneficiary designations can override a will.

3. Practical steps Aflac employees can take to align estate plans with their intentions.

Divorce is often considered the final stage in dividing assets and property. However, for many Fortune 500 employees, one overlooked detail can upend years of careful planning and unintentionally allow an ex-spouse to receive a significant inheritance. If beneficiary names on key accounts and policies remain unchanged, even the most thorough will cannot stop this outcome. Because certain assets transfer directly to the listed beneficiary without going through probate, retirement plans, life insurance policies, annuities, and some bank accounts are especially at risk.

Many people don’t realize how prevalent this issue is. According to Wealth Enhancement financial professional Patrick Ray, 'Your ex‑spouse is typically treated as if they predeceased you for the purposes of your will under many state laws once a divorce is finalized.' This may remove them from the will, but not from all accounts. That means that while state law might automatically exclude an ex from a will, it does not override beneficiary designations on Aflac employee retirement accounts and insurance.

Why Wills Are Not Enough

Some believe that updating a will by itself is sufficient to carry out their wishes. However, wills have limitations that can undermine even the most thorough planning. For example, a will that is valid in one state may no longer be effective in another, and states like Florida may require a new will after divorce. For Fortune 500 employees relocating between different states, intestate succession laws could intervene, transferring property to unintended relatives.

'The biggest misconception is that your will covers everything,' says Patrick Ray. The reality is that many accounts pay directly to the person listed as beneficiary, bypassing probate altogether.

Beneficiary Designations Override Wills

Beneficiary designations are often the single biggest risk in estate planning. Retirement funds such as 401ks, IRAs, pensions, annuities, life insurance, and payable-on-death bank accounts pass directly to the person listed. So for Fortune 500 employees, if an ex-spouse is still listed, that person will receive those assets—regardless of what the will states.

According to Wealth Enhancement financial professional Michael Corgiat, 'A will only controls assets in your sole name without a designated beneficiary.' Overlooking even one outdated designation could undo a lifetime of planning and result in benefits going to someone unintended.

Federal Law Can Override State Protections

When federal law applies, the situation becomes more complex. Retirement programs such as 401ks and pensions fall under ERISA, which requires administrators to honor the named beneficiary, even if that person is an ex-spouse. For Fortune 500 employees covered under ERISA plans, this federal rule takes precedence over state divorce laws.

In some cases, divorce decrees may require an ex-spouse to remain as beneficiary to satisfy obligations like child support or alimony. 'It’s crucial to verify what your divorce orders actually state,' warns Corgiat.

Beyond Wills: Trusts Provide Additional Coverage

Employees and retirees can strengthen their estate planning by using trusts alongside wills and beneficiary forms. Revocable and irrevocable living trusts can help channel assets more effectively and lessen the chances of an ex-spouse receiving an unintended inheritance. For Fortune 500 households, trusts can offer adaptability, protection from creditors, and potential tax advantages, depending on the type selected.

Prenuptial and postnuptial agreements can also help by clearly defining inheritance rights, reducing disputes, and offering clarity in the event of divorce.

The Consequences of Overlooking Updates

Failing to update beneficiary designations, wills, or trusts can erase years—even decades—of preparation. For Fortune 500 professionals, this could result in large retirement accounts or life insurance payouts going to an ex-spouse instead of children or a current partner. Estate and probate laws vary considerably by state, and ERISA introduces another layer of complexity, making it critical to coordinate with professionals.

Corgiat emphasizes, 'Attempting to handle these decisions without professional help is risky.' Working with financial advisors and attorneys can help align estate planning with current wishes.

Practical Steps to Stay Aligned

To mitigate risk, employees should:

1. Update beneficiary designations promptly after divorce.

2. Confirm that divorce orders are being followed.

3. Review wills and trusts after major life events such as marriage, divorce, childbirth, or relocation.

4. Consider using trusts to centralize distribution of assets.

5. Consult with financial advisors and attorneys to navigate state and federal regulations.

Recent data shows that over half of U.S. households had retirement accounts such as 401ks or IRAs ¹ —which highlights how common it is for Fortune 500 retirees to hold assets that might pass through outdated beneficiary designations.

Even if a will is updated, an ex-spouse could still receive benefits through overlooked accounts. Trusts, updated designations, and careful review of divorce orders are key tools for aligning estate documentation with long-term wishes.

Think of it like home protection: while a strong front door (the will) may be locked, open side gates (outdated beneficiary designations) can grant entry. Fortune 500 employees should confirm that every account and document is consistent with their intentions—so their plans function as intended.

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Sources:

1. American Society of Pension Professionals & Actuaries. ' More Than Half of U.S. Households Have Retirement Accuonts, CRS Says ,' by John Iekel. March 4, 2025. 

Other Resources:

1. Hutchinson Thomas. ' The importance of updating your will after a divorce .' May 4, 2024. 

2. Waypoint Legal. ' Beneficiary Designations: Why You Should Regularly Update Them .' March 4, 2025. 

3. Investopedia. ' Divorce and 401(k): What You Need to Know ,' by Greg Daugherty. Feb. 7, 2025.