Interesting Divorce issue: What happens to beneficiaries of life insurance, if the beneficiary is a spouse -- after divorce?
Let's say that you had lovely nuptials and are madly in love, so much so, you put your new spouse on your life insurance policy (a private contract) as beneficiary. Shortly thereafter, things are not as rosy and you two decide to go separate ways. A separation agreement is incorporated into a final decree of divorce and away you each go...blissfully. Then you die. Oooops. Forgot to change the beneficiary! Now there is a contract with the former spouse as beneficiary.
This is truly an area ripe for litigation. In most states there is a presumption upon divorce that the beneficiary is no longer the former spouse. This means that the funds would go to the decedent's estate. In most cases, however, the beneficiary status of life insurance is addressed in the actual separation agreement. This approach prevents any confusion and shows the intent of the contract holder. On the flip side, it is even MORE important if the decedent intends or is required to keep the policy beneficiary as the former spouse (which sometimes occurs). The separation agreement could be produced as evidence.
Be certain to discuss this issue with your divorce attorney. It is seriously a "life or death" matter.
THE RATLIFF LAW FIRM | www.ratlifflaw.netCedar Bluff, VA | Bluefield, WV | Weston, WV888-374-5078