In 2009, the U.S. Supreme Court opined on a case (Kennedy vs. Plan Administrator) where a divorcing husband failed to change the beneficiary on his retirement plan. His ex-wife was listed as the beneficiary despite the fact they had a divorce decree in which she was entitled to that money. An appeals court upheld the payment to the ex-wife under the ERISA law (the law that regulates retirement plans). Other cases in the federal courts had opined that the divorce decree could amount to a waiver of benefits, even without a qualified domestic relations order (QDRO).
The case rose to the U.S. Supreme Court and they rendered an opinion in order to clear up the different rulings. The Court said “the question remains whether the plan administrator was required to honor [the ex-wife’s] waiver [in the divorce] with the consequence” that the benefits should have been paid to the estate. “We hold that it was not, and that the plan administrator did its statutory ERISA duty by paying the benefits to [the ex-wife] in conformity with the plan documents.” The court further stated, “[the ex-husband’s] designation of [the ex-wife] as his beneficiary was made in the way required; [the ex-wife’s] waive was not.”
The court, in a footnote to the opinion, added that the ex-husband’s estate could sue the ex-wife (actually, now her estate as she’s passed away as well) to obtain the money since the waiver agreement was contractual; this would not violate ERISA since the money in question would have already been paid out.
Again, the bottom line is to make sure you’ve changed all of your beneficiaries during the divorce process. The burden is on you.