What happens when an ex-spouse is listed as the beneficiary of a life insurance policy?

My husband and his ex-wife were divorced 28 years ago. She subsequently moved out of state and recently died. My husband is the beneficiary on her life insurance policy. She was the owner but never changed the beneficiary. Now state law is saying that an ex-spouse cannot be a beneficiary unless so stated specifically in the divorce decree. Since the divorce occurred in another state, how can one have the foresight to have put that into the divorce decree? Was this law even in effect 28 years ago? If not, how (again) was that supposed to be part of a divorce decree? In any case, there was no contingency listed. We just want to pay off the funeral home and pay her final expenses. What recourse does my husband have?

Asked on July 22, 2014 under Insurance Law, Pennsylvania


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

I am so sorry for your loss.  Generally speaking, a divorce severs the spouse's right to inherit from the other spouse and so hold's true for life insurance policies.  But here are a few exceptions.  The state in which the divorce was issued - and the law at the time - will matter.  If state divorce law severed the right to inherit under a life insurance policy with the issuance of a divorce then he has no right to inherit.  Now understand you can leave your life insurance to anyone you chose but many times state law will require the owner of the policy to re designate the ex spouse after the divorce. This is so that a clear intent is shown to leave it to him or her rather than she just forgot to change it after the divorce. Also, if they had children then the divorce decree would have required that he keep a policy for her benefit and she him to insure that there would be support for the child should one of them pass away. That is how it is part of the divorce decree. If you are being told that the beneficiary designation is not valid and you want to challenge that ask the insurance company to interplead the money in to court. If the designation fails then the money most likely goes to the "estate" under the terms of the policy.  Now, the funeral expenses are a priority debt of the estate. So whom ever is appointed as the Personal Representative will pay that and her final debts.  Good luck.

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