Why Updating Beneficiaries After Divorce (and Other Life Changes) Is Critical in Indiana-Especially for Retirement and Insurance Accounts

On February 2, 2026, the Seventh Circuit Court of Appeals, which covers Indiana, ruled that sending a fax to request removal of a beneficiary when the plan documents require contacting the benefits center or updating the intended beneficiary online do not constitute substantial compliance, even when the fax clearly evidences intent to make the change. It reversed the district court and awarded life insurance proceeds to the decedent’s ex-wife in Packaging Corp. of Am. Thrift Plan for Hourly Emps. v. Langdon, No. 25-1859, 2026 U.S. App. LEXIS 3261, at *1 (7th Cir. Feb. 2, 2026).

Why beneficiary designations matter more than most people think

Many valuable assets transfer outside probate, meaning they pass by contract rather than by a will. Examples commonly include:

• Employer retirement plans (such as pension plans and other workplace plans)
• Individual retirement accounts (IRAs)
• Life insurance policies and annuities

For these accounts, the “beneficiary” line is not a formality. It is the direction the company is generally required to follow when paying death benefits.

Indiana’s baseline risk: divorce does not automatically change a life insurance beneficiary

In Indiana, longstanding case law recognizes that a divorce decree, standing alone, does not itself change the beneficiary named in a life insurance policy. In practical terms, if a former spouse remains the named beneficiary on a policy, that former spouse may still be positioned to receive the proceeds when the insured dies unless the beneficiary designation is changed in the manner required by the policy.

This is a core reason Indiana residents should treat beneficiary review as a “must-do” item immediately after divorce and again after any significant family or financial change.

The retirement-plan complication: federal law can override state-law expectations

When the retirement benefit is part of an employer-sponsored plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), federal law adds a critical layer. ERISA is designed to promote uniform plan administration nationwide, and it generally requires plan fiduciaries and administrators to follow the plan documents when deciding who gets paid.

The practical consequence is that state-law rules and common assumptions that “divorce revokes my ex automatically” may not control the outcome for ERISA-governed benefits. If the plan’s records still list a former spouse as beneficiary, the plan may be required to pay that person, even if family members object.

What the 2026 ruling underscores for Indiana families

For Indiana residents, the combined effect of (1) Indiana’s traditional rule that divorce alone does not change a life insurance beneficiary and (2) ERISA’s emphasis on paying benefits according to plan documents can make beneficiary updates especially urgent.

A practical Indiana beneficiary-update checklist

• Request a current beneficiary confirmation from each carrier/plan (do not rely on memory).
• Update beneficiaries using the company’s required process (online portal, notarized form, or witnessed form as applicable).
• Add and update contingent beneficiaries.
• After divorce, confirm whether a QDRO is required for any workplace retirement plan benefits and confirm the plan’s acceptance procedures were satisfied.
• Store confirmation records with your estate planning documents and revisit the designations annually.

Bottom line

In Indiana, beneficiary designations should not be “set and forget,” particularly after divorce. The 2026 federal appellate ruling is a timely reminder that if the paperwork is not updated according to the rules required by the plan administrator, the law may enforce the outdated designation, often with no remedy for survivors.

This article is for informational purposes only and does not constitute legal advice.