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.
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PAYMENT RESPONSIBILITIES -- Payment of premiums on insurance policies can be part of the divorce settlement, and some insurance, such as whole life, may be assets in a marriage.
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