What Happens If an Employee’s Life Insurance Beneficiary Isn’t Updated? (ERISA Rules)
Last Updated on May 14, 2026 / Benefits & Compensation, Recordkeeping
Question:
We recently have had a long time employee pass away unexpectedly. I learned they never updated their beneficiary information after his divorce and remarriage. His ex-wife is still listed as the beneficiary. His current wife is understandably upset. Is there anything I can do to correct this with the insurance carrier? Did I fail in my duties somehow by not having this updated?
Answer:
Assuming that this was against the deceased employee’s wishes, it is quite an unfortunate situation. As the employer, there is nothing you can do about a beneficiary designation form that has not been updated. Beneficiary forms are the responsibility of the employee and if an employee fails to complete one, update one, or completes it incorrectly, that is their responsibility, not yours. Some employees balk at making the change, indicating their will is up to date; however, employees should not assume that state law will revoke early beneficiary designations for company plans and allow a will to prevail.
Why ERISA Benefit Rules Matter for Beneficiaries
From a legal and administrative standpoint, there is very little an employer can do once a benefit is in place and the employee has passed away. For employer-sponsored life insurance and similar benefits governed by ERISA, the carrier is generally required to pay the beneficiary listed on the most current form on file—regardless of marital status changes or what may be stated in a will. The Employee Retirement Income Security Act dictates that the plan administrator of these plans must turn over the funds to the beneficiary listed on the forms, no matter if they were remarried or what is listed in the employee’s will. Many such instances have ended up in court but honestly, there is nothing the employer can do in these situations.
What Can HR Do to Prevent This Issue?
Bricker Graydon Wyatt, Benefit Attorneys, provide guidance on updating beneficiaries in this document link and provides best practices to consider.
It is essential for employers to have employees complete a beneficiary form for all of their accounts. Employers/benefit administrators typically have employees complete these forms upon eligibility but they are never mentioned again. Employers are encouraged to remind employees during the open enrollment process to make sure their beneficiaries are up to date. Marriage, Divorce, and Births occur during the employment cycle and many employees forget to update their beneficiary to reflect those changes. In addition, as a plan administrator, you must also remember to get updated beneficiary forms when you change providers. Many employers shop around for benefits and make carrier changes. It is essential that employees complete new beneficiary forms during such changes.
No one wants to deliver the news to a grieving spouse that the employee never updated their beneficiary. No, it is not an employer’s responsibility BUT if we see our job as assisting in the health and welfare of our employees, reminding them to update their beneficiary is an easy way to do that and to avoid such a situation.
What HR Can Do Moving Forward
While you can’t change the current situation, you can help prevent future issues with a few simple practices:
- Build beneficiary checks into your processes. Encourage employees to review and update beneficiaries during open enrollment or annual benefits reminders.
- Tie updates to life events. Remind employees to revisit their elections after major life changes—marriage, divorce, birth, etc.
- Re-collect forms during vendor changes. When switching carriers, treat it as a reset point to gather updated beneficiary information.
- Reinforce the “why”. Many employees assume their will overrides workplace benefits—but that’s not typically the case. A quick reminder can make a meaningful difference.
FAQs About Beneficiary Designations
Can a will override a beneficiary designation?
No, in most cases, beneficiary designations on ERISA-governed plans take precedence over a will.
Can an employer change a beneficiary after an employee’s death?
No, employers must follow the most recent beneficiary designation on file.
How often should employees update beneficiaries?
Employees should review beneficiary designations during open enrollment and after major life events like marriage, divorce, or birth of a child. Employers should encourage those updates annually.
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