The decree is signed and the file is closed. Somewhere in a drawer is a life insurance policy naming your former spouse, and a 401(k) form you filled out years ago and have not thought about since. What happens to beneficiary designations after divorce in South Carolina is mostly good news — with one exception large enough to swallow the rule.

What the statute revokes automatically

Two dates matter before any of this applies to you. The section in its current form was rewritten by 2013 Act No. 100 and took effect on 1 January 2014, and before that South Carolina law ran the other way — a divorce did not by itself disturb a beneficiary designation. If your divorce predates 2014, do not assume the revocation rule reached it; that needs checking. The exclusion for state and local government employee benefit plans is newer still, added by 2018 Act No. 250 with effect from 18 May 2018.

Section 62-2-507(c) provides that, except as the governing instrument, a court order, or a marital-estate contract expressly provides otherwise, a divorce or annulment revokes any revocable disposition, appointment of property, or beneficiary designation made to the former spouse — along with any power of appointment conferred on them, and any nomination of them as personal representative, trustee, conservator, agent, attorney in fact, or guardian.

The definition of “governing instrument” in § 62-2-507(a)(4) is deliberately broad. It expressly includes wills, revocable inter vivos trusts, powers of attorney, life insurance beneficiary designations, annuity beneficiary designations, retirement plan beneficiary designations, and transfer on death accounts.

The statute also severs survivorship. Under § 62-2-507(c)(2), divorce severs the former spouses’ interests in property held as joint tenants with right of survivorship — real and personal property, joint and multiple-party bank, savings and loan and credit union accounts, and any other co-ownership with survivorship incidents — so the decedent’s share passes as their property rather than to the ex.

Title to real property has its own mechanics, covered in our post on how divorce converts joint tenancy deeds in South Carolina.

Where a provision is revoked, § 62-2-507(e) gives it effect “as if the former spouse predeceased the decedent.” And under § 62-2-507(f), remarrying the same person revives what was revoked.

The exception that matters most: federal preemption

Here is the part that costs families money, and it is not a technicality — it is the single most likely way this statute fails to protect you.

Many employer-sponsored plans are governed by the Employee Retirement Income Security Act of 1974. Where ERISA applies, federal law overrides the state revocation statute, and the plan administrator pays whoever is named on the form.

The Supreme Court settled the point in Egelhoff v. Egelhoff, 532 U.S. 141 (2001). Mr Egelhoff worked for Boeing and had a life insurance policy and a pension plan, both governed by ERISA, both naming his wife. They divorced. Two months later he died, and his ex-wife was still the listed beneficiary. His children from a previous marriage argued that Washington’s revocation-on-divorce statute had removed her. Justice Thomas framed the question as whether ERISA “pre-empts that statute to the extent it applies to ERISA plans,” and answered it in four words:

We hold that it does.

The $46,000 in life insurance went to the former spouse.

That is not a distant problem. A federal court in South Carolina reached the same result on this state’s statute in Bostic v. Bostic, No. 6:14-2130-BHH (D.S.C. Sept. 3, 2015). A widow sought life insurance proceeds; the former spouse named on the policy argued ERISA preempted the statutory claim. The court agreed, granted judgment on the pleadings, and held the named former spouse was “the proper beneficiary of the insurance policy.” The funds were released to her.

South Carolina’s statute anticipates exactly this. Section 62-2-507(h)(2) begins “If this section or any part of this section is preempted by federal law with respect to a payment, an item of property, or any other benefit covered by this section...” and then provides that a person who receives such a benefit not for value, and who is not entitled to it under the section, must return it or is personally liable to the person who would have been entitled had the section not been preempted.

Read that as what it is: a lawsuit, not a safeguard. The money is paid to your former spouse first, and your intended beneficiary is left suing to recover it. **Change the form. Do not rely on the statute for an employer plan.**

The statute carves out one further category on its face — the definition of “governing instrument” excludes a beneficiary designation made in connection with a governmental employee benefit plan established or maintained for state or local government employees, or an agency of either.

Where nothing is revoked automatically, a separation agreement may not save you

Add up the exceptions — ERISA plans, government employee plans, separate maintenance without a divorce — and a large number of South Carolinians are in a position where § 62-2-507 does nothing for them. In that situation people often assume the divorce paperwork covered it. Frequently it did not.

Auten v. Snipes, 371 S.C. 41, 636 S.E.2d 644 (Ct. App. 2006), is the case to know. A husband named his wife as beneficiary of a retirement account. They divorced. Their separation agreement contained general language of release and awarded each of them the retirement accounts in their own names. He then lived another seventeen months and never changed the beneficiary form. When he died, his estate sued to recover the account from the ex-wife.

The estate lost. The Court of Appeals set out the only two ways a separation agreement can defeat a named beneficiary’s interest:

First, a named beneficiary may be precluded from recovery when a separation agreement specifically addresses a particular policy/account providing an expectancy interest and the agreement contains language of release applicable to the policy/account. Second, when a separation agreement provides general language of release without specifically addressing the policy/account providing the expectancy interest, a named beneficiary may be precluded from recovery when the policy/account owner intended for the general waiver to apply to the expectancy interest.

Neither route worked. The agreement did not specifically address a retirement account in which one spouse was the named beneficiary, so the first route failed. And on the second, the court found no evidence the husband intended the general waiver to reach the beneficiary designation — pointing to the seventeen months in which he could have changed the form and did not. His inaction was read as intention.

Two lessons, and they run in opposite directions depending on which side of it you are on. If you want your ex removed, a general release is not enough: name the policy or account in the agreement, and then change the form anyway. If you are the named beneficiary, the designation may well be yours regardless of what the divorce paperwork says in general terms.

Separate maintenance is not divorce for this purpose

Section 62-2-507(a)(2) says so expressly: “A decree of separate maintenance that does not terminate the status of husband and wife is not a divorce for purposes of this section.”

So a couple who obtained an order for separate support and maintenance, and never divorced, have revoked nothing. Every designation stands.

Three more limits worth knowing

**No other change of circumstances counts.** Section 62-2-507(b) states that no change of circumstances other than those described in the section and § 62-2-803 effects a revocation. Estrangement, separation, and intention do nothing.

**A court order or agreement can override the revocation.** The statute’s opening words in subsection (c) yield to the express terms of a governing instrument, a court order, or a marital-estate contract. If your settlement agreement required you to keep an ex named as beneficiary of a policy securing support, that obligation controls.

**Payors are protected until they are told.** Under § 62-2-507(g)(1) a payor is not liable for paying a designated beneficiary in good faith before it receives written notice of the divorce, and subsection (g)(2) requires that notice by registered or certified mail, return receipt requested, or by service in the same manner as a summons.

What to do after your divorce is final

Request a current beneficiary statement from every life insurance policy, annuity, retirement account, and transfer-on-death account.

Submit new designation forms for employer plans first — those are the ones the statute may not reach.

Check whether your settlement agreement requires you to keep anyone named. Changing a designation you were ordered to maintain creates a different problem.

Update your will, powers of attorney, and any trust; the statute revokes fiduciary nominations too, but a clean document avoids the argument.

Name contingent beneficiaries, so a revoked primary designation does not leave the asset in your estate.

What a surviving spouse can claim generally is covered in our post on marriage and inheritance rights in South Carolina.

Frequently asked questions

Does divorce automatically remove my ex from my life insurance?

For a policy you own individually, § 62-2-507 revokes the designation on divorce unless a governing instrument, court order, or marital-estate contract says otherwise. For an employer-sponsored ERISA plan the answer is different: Egelhoff v. Egelhoff holds ERISA preempts state revocation statutes as applied to those plans, and a South Carolina federal court applied that to this statute in Bostic v. Bostic. Change the form.

We are separated but not divorced. Does that change anything?

No. Section 62-2-507(a)(2) provides that a decree of separate maintenance that does not end the marriage is not a divorce for purposes of the statute.

What happens to the money if the designation was revoked?

Section 62-2-507(e) treats the revoked provision as though the former spouse predeceased you, so the benefit passes to the contingent beneficiary or under the terms of the instrument.

We remarried each other. Is the old designation back?

Yes. Under § 62-2-507(f), provisions revoked solely by the section are revived by remarriage to the former spouse or by nullification of the divorce.

My ex was already paid. Is there anything to be done?

Possibly. Subsections (g) and (h) address a payor’s protection before notice, and the obligation of someone who received a benefit not for value to return it. It becomes a claim against the recipient rather than the plan.

Talk to a Charleston family law attorney

The statute does a great deal of work automatically, and then stops precisely where the largest asset often sits. Klok Law Firm handles South Carolina family law in Charleston, Mount Pleasant, Berkeley, and Dorchester counties. Call Klok Law at (843) 701-1695 to discuss your options.

This article is for general information only and is not legal advice. For advice about your specific situation, contact Klok Law at (843) 701-1695.