Divorce Source: Divorce and Designation of a Beneficiary for a Life Insurance Policy

Key Points

There are many statutes governing divorce and the designation of a beneficiary on a life insurance policy. Often judges will enter a court order requiring the spouse required to pay alimony or child support to take out a life insurance policy to cover any payments if the paying spouse dies. Make sure the terms of this agreement include an irrevocable beneficiary clause.

The general rule is that divorce does not, per se, affect or defeat a spouse’s rights as a designated beneficiary in a policy on the other spouse’s life, absent a change in beneficiary designation, a provision in the contract of insurance itself which makes the beneficiary ineligible if the status of spouse does not exist at the time of death, or a specific statute revoking beneficiary status on divorce.

See:

Jenkins v. Lovelady, 290 Ala. 25, 273 So. 2d 189 (1973);
Cooper v. Muccitelli, 661 So. 2d 52 (Fla. Dist. Ct. App. 1995);
Belote v. Belote, 167 Ga. App. 8, 306 S.E.2d 24 (1983);
In re Estate of Downey, 293 Ill. App. 3d 234, 687 N.E.2d 339 (1997);
Wolf v. Wolf, 147 Ind. App. 240, 259 N.E.2d 93 (1970);
Hollaway v. Selvidge, 219 Kan. 345, 548 P.2d 835 (1976);
Life Insurance Co. v. Jackson, 487 A.2d 1150 (Me. 1984);
Redd v. Brooke, 96 Nev. 9, 604 P.2d 360 (1980);
Harris v. Harris, 83 N.M. 441, 493 P.2d 407 (1972);
Salvin v. Salvin, 165 A.D. 362, 151 N.Y.S. 60 (1914);
Raack v. Bohinc, 17 Ohio App. 3d 15, 477 N.E.2d 1155 (1983);
Rhodes v. Equitable Life Assurance Society, 109 Or. 586, 220 P. 736 (1923);
Duncan v. Investors Diversified Services, Inc., 285 S.C. 467, 330 S.E.2d 295 (1985);
Marquet v. Aetna Life Insurance Co., 128 Tenn. 213, 159 S.W. 733 (1913);
Partin v. Cordova, 464 S.W.2d 956 (Tex. Civ. App. 1971);
Estate of Anello v. McQueen, 953 P.2d 1143 (Utah 1998);
Chase v. Chase, 74 Wash. 2d 253, 444 P.2d 145 (1968);
Washington v. Hicks, 109 Wis. 2d 10, 325 N.W.2d 68 (Ct. App. 1982).

The rule is not universal, however. Some states have divestiture statutes whereby the status of a spouse as named beneficiary is terminated by the entry of the divorce decree, without regard to the fact that the spouse remains the named beneficiary. E.g., Mich. Comp. Laws Ann. 552.101; Tex. Fam. Code Ann. 3.632(a)-(c); Va. Code Ann. 20-111.1; Wash. Code Ann. 11.07.010.

Information Provided by: Divorce Source, Inc.

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