What happens if an ex-wife is left on a life insurance policy?

Can they inherit? If not, what happens?

Asked on March 10, 2019 under Insurance Law, Texas


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

As a general rule, an ex-spouse is not eligible to receive the proceeds of a life insurance policy payable on the death of the other ex-spouse. If you forget to change the beneficiary designation, TX law prvides that the insurer should be instructed to pay the proceeds to the alternate beneficiary. If there is no such beneficiary designated, then the company must pay the proceeds to the deceased's estate. That having been said, there are exceptions. In TX there are 3 exceptions to the rule that a former spouse cannot receive the proceeds of a life insurance policy: (1) if the former spouse has custody of minor children then the divorce decree may name that spouse as beneficiary; (2) the insured may give written instructions to the insurance company after the divorce redesignating the former spouse as beneficiary; and (3) the policy may designate the former spouse as trustee of the proceeds on behalf of or for the benefit of a dependent. 

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