Will Former Spouse Inherit Bank Account if Named as P.O.D. Beneficiary?

I received a note recently from someone whose brother had recently passed away. Her brother was divorced and had no children. He was survived by four siblings. Both his parents were deceased. His savings account designated his ex-wife as the P.O.D. beneficiary.

The author wondered whether the ex-wife would inherit the money in the account.

The Texas Estates Code provides that if after a decedent designates a spouse as a P.O.D. beneficiary on a P.O.D. account or other multiple-party account, the decedent’s marriage is dissolved by divorce, annulment, or a declaration that the marriage is void, the designation provision on the account is not effective as to the former spouse unless:

1. the court decree dissolving the marriage designates the former spouse or the former spouse’s relative as the P.O.D. payee or beneficiary;
2. the decedent redesignated the former spouse or the former spouse’s relative as the P.O.D payee or beneficiary after the marriage was dissolved; or
3. the former spouse or the former spouse’s relative is designated to receive the proceeds or benefits in trust for, on behalf of, or for the benefit of a child or dependent of either the decedent or the former spouse.

If none of those exceptions exist, then the alternate beneficiary will inherit, or if no alternate beneficiary is named, then the funds would be distributed as part of the deceased person’s estate.