Divorce and the Award of the Life Insurance Policy
When a divorce decree awards a life insurance policy to one spouse as an item of property, the question arises as to whether the award to the one spouse divests the other spouse of rights as named beneficiary. See generally Annotation, Divorce Decree Purporting to Award Life Insurance to Husband as Terminating Wife-Beneficiary’s Rights Notwithstanding Failure to Formally Change Beneficiary, 70 A.L.R.3d 348 (1976 & Supp. 1999).
Several courts considering this issue have held that a dissolution court’s division of the parties’ life insurance policies does not, by itself, affect a beneficiary interest; rather, some additional language addressing this expectancy interest is required or the beneficiary spouse must have waived this interest as part of a stipulation or settlement.
On the other hand, some courts have held that a decree granting one spouse ownership of a life insurance policy terminates the other spouse’s rights as beneficiary.
Resources & Tools
DISABILITY INSURANCE -- A disability policy can be essential should an employment income source no longer be available due to disability. A single person who becomes disabled and unable to work may be at risk, particularly if the former spouse who is providing financial support becomes disabled. A disability policy pays a monthly benefit, which is usually around 60 percent of gross wages.
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