The divorce process typically includes an agreement on how all assets and debts are divided amongst the two parties. What then happens when one spouse dies and life insurance benefits to ex-spouse are in place. The short answer is, it depends.
Life Insurance Policies Mentioned in Separation Agreements
In some cases, life insurance policies are actually mentioned in separation agreements. One spouse may agree to leave his/her ex-spouse as the beneficiary in exchange for some other marital asset. Sometimes, an ex-spouse may be left on there so that proceeds may help support a child from the marriage. When life insurance policies are actually covered in the agreement, it simplifies the matter. However, there are cases where the parties didn’t realize that life insurance should be discussed or even forgot that a policy exists.
Life Insurance Benefits to Ex-Spouse
According to the Massachusetts Uniform Probate Code, divorce revokes the designation of an ex-spouse as a beneficiary on non-probate transfers such as life insurance policies. Although this is part of the law, its enforcement is another matter. There have been cases where ex-spouses were granted benefits from a decedent’s 401(k), pension, and/or life insurance policy after divorce. As with most legal matters, every situation is truly unique.
Avoiding Law Suits Over Life Insurance
To avoid a potential dispute over life insurance benefits to ex-spouse, it is important to obtain assistance from an estate planning attorney after your divorce. Your attorney will review all assets and policies, make any necessary changes to beneficiaries, and make your wishes clear. Whether your decision is to remove or leave your ex-spouse as a beneficiary on your life insurance policy, not handling the matter correctly can result in avoidable disputes upon your death.
Life Insurance Benefit Disputes
If you find yourself currently in a dispute over life insurance benefits, it is important to secure legal representation. All cases are truly unique and are won or lost based on the information available from both sides of the dispute. For a free consultation on your particular case, contact the Martino Law Group.