I REMEMBER the first time we met. Josh—not his real name—and I went to rival high schools in the Washington, D.C., area. During our senior year, we competed in a track meet. Someone mentioned that we would be going to the same college in the fall, so I went over to introduce myself—a little awkwardly, as he had just annihilated me in a race. A few months later, knowing few people on campus, we were happy to discover that we’d both enrolled in the college’s Army Reserve Officers’ Training Corps (ROTC) program.
Josh was garrulous, and he possessed that rare combination of incredible athletic and academic ability. When the U.S. Army decided what jobs we would have, they astutely assigned Josh to the artillery—with its loud guns and adventure, but also need for mathematical precision—while packing me off to law school.
Josh’s career in the Army was cut short when he died in 2010, a result of complications stemming from a brain injury suffered during combat in Afghanistan. At the time of his death, Josh had just decided that his marriage was unsalvageable and headed toward divorce. Within days of that decision, he fell ill, slipped into a coma and eventually passed away.
Josh died before he could change the beneficiary on his life insurance. Though it has been nearly a decade since his funeral, I still viscerally recall standing in Arlington Cemetery with a few of our ROTC classmates and watching Josh’s family sitting alongside his wife. His spouse would be receiving $400,000 in life insurance—the standard amount of coverage for those who serve in the military. I remember thinking about all the movies I had seen where the 21-gun salute rings out. Now, I was living that surreal nightmare here in our own hometown.
Perhaps Josh might have found a way to make his marriage work. Regardless, in the years since his death, I’ve represented numerous clients whose loved one had passed away, only to find that the deceased had never changed an old life insurance beneficiary designation.
It’s a story that many military attorneys have seen play out far too many times. In fact, it became such a problem that the Army began proactively requiring all soldiers to verify life insurance beneficiary designations every year or two. For the rest of America, however, the burden is on the individual to ensure his or her beneficiary designations are up to date.
Slightly more than half of all states nullify a beneficiary designation that names an ex-spouse. While the Supreme Court recently affirmed this process, it’s still possible in many states for ex-spouses to receive life insurance proceeds if they’re listed as the beneficiary. Even in the states that nullify beneficiary designations, that typically only happens when the divorce is final, so it behooves anyone in the process of divorcing to make the change immediately. What if an ex-spouse is named beneficiary through an employer-sponsored plan governed by federal law, such as the military’s life insurance program? The Supreme Court has ruled that the ex-spouse gets the life insurance, regardless of state law.
This Memorial Day, like every Memorial Day since Josh passed away, I will reflect on his passion for life. I’m grateful for every moment we spent together, from competing on the track to those years spent as brothers-in-arms. I am also grateful that the Army now forces soldiers to update their insurance beneficiary designations. If you’re reading this article, and you or folks you know might need to update their records, please make the necessary changes as soon as you can and encourage others to do the same.
John Goodell is a government attorney who has spent much of his career advocating for military and veterans on tax, estate planning and retirement issues. His biggest passion is spending time with his wife and kids. Follow John at HighGroundPlanning.com and on Twitter @HighGroundPlan. His previous articles were Income Isn’t Wealth, Average Is Great and Garbage Time. The opinions expressed here aren’t necessarily those of the U.S. government.