What Does Divorce Have to Do with Life Insurance?
When you are getting divorced, oftentimes the relationship between you and your soon to be ex-spouse is contentious and volatile. In these cases many people find the process of dividing children, property and debt takes every bit of energy and attention they can muster. The little things – like changing life insurance ownership and beneficiaries – can easily fall between the cracks.
Obviously, life insurance is not a little thing. But it can be overlooked during a divorce, even by couples who get relatively simple uncontested divorces. If your divorce is ongoing, be sure to make your attorney aware of your life insurance situation.
Who paid the initial premium?
Under Texas law, a divorce court considers the source of the initial premium payment to determine whether the policy is separate or marital property.
If your divorce is final and you never got around to removing your ex as a beneficiary, you can rest assured that with few exceptions any future life insurance payouts to a former spouse are nullified by the divorce.
A former spouse is out, except for certain situations
In Texas, some exceptions which would allow a former spouse to receive your life insurance proceeds include:
- Your divorce decree specifies that your former spouse will continue to be a beneficiary after the divorce
- You designate your former spouse as your beneficiary after your divorce was final
- Your former spouse is appointed as the trustee or custodian of your life insurance money for the benefit of a minor child
Of course, the best course of action is to bring up the subject of life insurance to your divorce lawyer before your case is finalized. An experienced family law attorney can discuss your situation and recommend a course of action to meet your goals.
If you need assistance navigating divorce proceedings, child custody or child support issues, call the Peterson Law Group at 936-337-4681 or 979-703-7014. Our experienced Conroe, Texas divorce attorneys take a firm stand to protect your rights and interests in every case.