Warren Hillman had been divorced for twelve years when he died. He had remarried. He had, presumably, told his second wife she was taken care of. Then the check from his federal life insurance policy went to the first one, because on a form he filled out in the 1980s, her name was still on the line.

The second wife sued. She lost, all the way up to the U.S. Supreme Court.

That case, Hillman v. Maretta (2013), is not an oddity. It is the logical end of a quiet truth: the paper you signed years ago can outrank the life you've lived since. If you've been through a divorce, a breakup, or any reshuffling of who matters to you, there is a good chance a document somewhere still names someone who no longer belongs there.

The form beats the story

Most people believe a divorce decree "handles everything." It doesn't, at least not automatically. A decree divides property and sets obligations between two people. Your accounts' beneficiary designations are contracts between you and a financial institution, and the institution generally pays whoever its records name.

That is why beneficiary designations tend to override a will. A will governs what passes through probate. A retirement account, life insurance policy, or payable-on-death bank account passes outside it, straight to the named person. Your carefully rewritten will can say one thing while the account form says another, and the form usually wins.

Many states have what are called revocation-on-divorce statutes. Depending on the state, a divorce may automatically cancel an ex-spouse's role in your will, and sometimes in certain other documents. This is where people get falsely reassured. Those statutes vary widely in what they cover, and they don't always reach every kind of account.

Two cases that should make you check

In Egelhoff v. Egelhoff (2001), a man named David Egelhoff died intestate-adjacent in the sense that matters here: his life insurance and pension plan, provided through his employer, still named his ex-wife. Washington State had a law saying divorce revoked such designations. The Supreme Court held that the federal law governing employer benefit plans, ERISA, pre-empted the state statute. The plan administrator was required to follow the plan documents, so the ex-wife's name stood.

Hillman applied similar logic to federal employee life insurance, where Virginia's attempt to redirect the money to the later spouse was likewise pre-empted by federal law.

The lesson isn't that you'll face a courtroom. It's narrower and more practical: for some account types, the state law you were counting on to clean up after your divorce may not apply at all. The only reliable fix is the form itself.

None of this is legal advice, and the specifics depend on your state and your account types. That uncertainty is precisely why the answer is to look, not to assume.

Why solo founders are especially exposed

A salaried employee has HR sending an annual enrollment reminder. A solo founder has no such nudge. You opened a brokerage account in your twenties, a SEP-IRA or Solo 401(k) a few years ago, a business checking account with a POD line you filled out at the counter in ten seconds. Each one holds its own beneficiary field, each set at a different moment in your life.

Behavioral science explains why these never get revisited. The status quo bias describes our tendency to keep whatever default is in place, even when changing it is cheap. Beneficiary forms are the purest example: the cost of leaving them alone is invisible until the day it is enormous, and it falls entirely on someone else.

There's also an emotional layer. Updating a beneficiary after divorce means admitting, in writing, that a chapter is closed. Plenty of people avoid it not from forgetfulness but from a flinch. Naming the new reality feels heavier than the old name on a form.

And then there's the business. If your entity's operating agreement, a buy-sell arrangement, or a transfer-on-death registration references a former partner or spouse, the problem compounds: your ex may not just receive a payout but hold a claim on something your current family needs to keep operating.

What actually goes wrong

Picture the quiet version. You die. Your current partner is named in your will. Your executor, doing everything right, begins the work of probate. Meanwhile, the retirement account custodian receives a death certificate and pays your ex, because their name is on file. No one did anything wrong. No one can easily claw it back. Your family learns about it weeks later, in a letter.

The louder version involves children. If the ex is named as beneficiary "for the kids," the money lands in an adult's hands with no obligation attached, or minor children inherit directly and a court-supervised arrangement opens. Either way, an outcome you never chose.

The cruelty of this failure is its fairness on paper. Everyone followed the documents. The documents were simply out of date.

Your next moves

Do these in order. Most take under an hour in total.

  • List every account that has a beneficiary field. Include retirement accounts (IRA, SEP, Solo 401(k)), life insurance, brokerage accounts with transfer-on-death registration, business and personal bank accounts with a payable-on-death designation, HSAs, and annuities. Write the institution, the account, and the date you last looked.
  • Log in or call and read the actual designation. Don't rely on memory or on the last statement. Print or screenshot the beneficiary page for each account. You are looking for names, percentages, and whether a contingent beneficiary exists.
  • Change what's wrong today, not after you consult your lawyer. Updating a form takes minutes and is reversible. Name a primary and a contingent beneficiary on each. If children are minors, ask your attorney how to name a trust or custodian instead of the children directly.
  • Check business paperwork for former names. Open your operating agreement, any buy-sell agreement, and entity registrations. Look for references to a former spouse or partner as owner, successor, or signatory.
  • Send one email to your attorney with the list. Ask whether your state's divorce rules apply to each account type, and whether your will, any trust, and your forms say the same thing. Then set a calendar reminder for the same date every year, and again after any marriage, divorce, birth, or death.

Where this fits in the bigger picture

Beneficiary hygiene is the smallest, cheapest piece of an estate plan, and it quietly decides where the largest sums go. It is also the piece most likely to be wrong, because it was right once and then life moved on.

That's the gap Heirloom was built for: a single place where a solo founder keeps the vault, the handoff instructions, and a live record of who is named on what, so a stale name is something you catch on a Tuesday rather than something your family discovers in a letter. If you'd like a place to keep that list current, you can take a look at Heirloom. But the list matters more than the tool. Make it this week.