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(from Jane Bryant Quinn’s Dimespring article dated 4/8/2013.  Click here for the original post. Jane is a nationally known commentator on personal finance with books and columns read and trusted by millions.  Read more of Jane’s work here.)

The story of Scott and Erika should be a wake-up call.

They married in 2005. As any new spouse would do, Erika made Scott the beneficiary of her company 401(k) retirement and life insurance plan.

The marriage went badly. They separated the following year. As part of the divorce agreement, Scott waived his legal right to Erika’s company benefits.

But Erika never got around to changing her plan’s beneficiary forms. When she died in 2011, Scott claimed the money. Erika’s parents sued.

Guess who won?

Scott did, the U.S Fourth Circuit Court of Appeals decided last month. (The court sits in Richmond, Va.) A hard-and-fast rule of federal law says that employee benefit plans can disperse money only to the person or people you name on the beneficiary form. It doesn’t matter what the will or divorce agreement says. “Fairness” doesn’t come up, either. The beneficiary form trumps all.

Erika’s parents, who are managing her estate, have another shot. The court also ruled that they have a right to sue Scott for the money, based on the waiver he signed during the divorce. That means even more expensive litigation.

All this could have been avoided if Erika had wrapped up the loose ends of her divorce by taking Scott’s name off her financial accounts.

Individual Retirement Accounts have the same rules as employee benefit plans. The name on the beneficiary form controls who gets it. In another case, a bachelor named his sister as beneficiary of his IRA. Much later, he married — forgetting about his old IRA form. Over the years, the account built up to more than $1 million — and, yes, his sister, not his wife, got every penny when he died.

In a third case, a lawyer (!) took his ex off all his accounts except his small IRA, and then remarried. Later — forgetting about the omission — he rolled most of his retirement assets into that vagrant IRA. When he died, his ex got the money, of course. His second wife was cut out. She sued the lawyer’s financial adviser, and lost.

If you have a 401(k), company life insurance plan or an IRA, do you even remember who is on the beneficiary form? Maybe you named two children and have since had a third. If anything happens to you, that third child would be cut out. Is your ex still hanging around, on paper? Did you name your parents or a sibling, back when you were single, and forget to name your husband when you married?

Over time, retirement plans can become a signicant pot of money. So make this your week to check the beneficiary forms for all your company and personal retirement accounts. Who did you name? Is that still OK? If not, change the names. And keep a copy in your files, so that you’ll aways know who the beneficiaries are.

If you don’t name anyone on the beneficiary form, the money will be paid into your estate, to be distributed according to your will. In most cases, that’s a big mistake, because income taxes will be owed on the lump sum. By contrast, if you leave retirement money to heirs through the beneficiary form, they can roll the it into inherited IRAs. That defers part or all of the tax.

What about assets you hold in other accounts? You might have beneficiary forms for bank accounts, mutual funds, brokerage accounts and life insurance held outside of a company plan.

In this case, the laws of most states protect you from yourself. If you divorce, your ex-spouse will usually be removed automatically from the beneficiary forms. The money might go to the person you named as second beneficiary, or into your estate.

Still, it’s smart to correct these beneficiary forms. I don’t know the corners of every state law, and in some places an ex still might have a case.

The ex — or whoever is on the form — will always have a case, if it’s an IRA or 401(k). If you want to leave the money to a new spouse, or your kids, or siblings, or whatever, make sure that beneficiary forms are right.