If in my separation agreement with my ex-wife it says that my life insurance policy must list my children as the primary beneficiaries, can I also list my new wife as a primary beneficiary along with them?

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If in my separation agreement with my ex-wife it says that my life insurance policy must list my children as the primary beneficiaries, can I also list my new wife as a primary beneficiary along with them?

It states that, “Each party shall name the 3 children named within this document as beneficiaries on their life insurance policies. In the event that either party re-marries, each party shall continue to name the 3 children named within this document as 1st and primary beneficiaries on their life insurance policies. Each party waives any interest they have in the other party’s life insurance proceeds…”

Asked on November 23, 2015 under Family Law, Maryland

Answers:

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

Answered 5 years ago | Contributor

 
The intention of that paragraph of the separation agreement is to make sure that your children are covered for support you give them during your life time should you pass away.  I wish that it were possible to see other clauses in there as well that may in fact deal with minimum policy amounts, etc., to see what the whole intent of the agreement.  In other words, does it say that you have to cover them only until a certain age (generally the age that child support ends in your state)?  Or that they are beneficiaries for life?  Here is my concern: a life insurance policy is a contract between the life insurance company and you. And while the law is generally that you can name anyone you choose on the policy, you have agreed here to name your three children and that they will receive the minimum amount (arguably as bargained in the divorce between you and your ex wife) in that policy.  If they have to be primary, then your new wife can only be what is called the residual beneficiary should none of the three inherit the proceeds. She can not be made to be put in a position to share equally with them as far as I can tell and given the limited amount that you have provided here.  Otherwise you will have a fight about the proceeds after you pass triggering what is called an interpleader action by the insurance company to deposit the proceeds in to court while your family dukes it out.  If you truly want to make sure that your new wife is covered take out a new policy for her alone.  Good luck.


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