Can an ex-spouse collect on a life insurance policy?

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Can an ex-spouse collect on a life insurance policy?

My husband passed 2 months ago. He had a life insurance policy through his work. His ex-wife was named as beneficiary on the policy, which he forgot to change. Since ours is a community property state, is she able to still collect. Are there any loop holes, etc.?

Asked on May 16, 2018 under Estate Planning, Nevada

Answers:

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

Answered 3 years ago | Contributor

Unfortunately, as a general rule, life insurance proceeds are paid to the named beneficiary regardless of their status as an ex-spouse. Typcially, divorce has no effect on who is designated to receive life insurance benefits; it does not automatically remove the ex-spouse as the beneficiary. The fact is that many people name their spouse as their life insurance beneficiary but later fail to update their policy in the event of divorce. In most states, the owner of a policy must change the beneficiary on their policy if they don't want their ex-spouse to receive policy proceeds.That having been said, there are instances in which an ex-spouse is not eligible to collect even if they are named as the beneficiary. For example, if the insurance policy a contains a provision that excludes a beneficiary from receiving benefits if spousal relationship does not exist at the time of the insured’s death. Additionally, a divorce decree may provide that the ex-spouse is no longer eligible to receive life insurance proceeds. Further, some jurisdictions have enacted laws that revoke a person’s beneficiary rights upon divorce.At this point you can consult with an attorney in your area and have them specifically explain NV's position on an revoking an ex-spouse's right to collect.

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

Answered 3 years ago | Contributor

Unfortunately, as a general rule, life insurance proceeds are paid to the named beneficiary regardless of their status as an ex-spouse. Typcially, divorce has no effect on who is designated to receive life insurance benefits; it does not automatically remove the ex-spouse as the beneficiary. The fact is that many people name their spouse as their life insurance beneficiary but later fail to update their policy in the event of divorce. In most states, the owner of a policy must change the beneficiary on their policy if they don't want their ex-spouse to receive policy proceeds.That having been said, there are instances in which an ex-spouse is not eligible to collect even if they are named as the beneficiary. For example, if the insurance policy a contains a provision that excludes a beneficiary from receiving benefits if spousal relationship does not exist at the time of the insured’s death. Additionally, a divorce decree may provide that the ex-spouse is no longer eligible to receive life insurance proceeds. Further, some jurisdictions have enacted laws that revoke a person’s beneficiary rights upon divorce.At this point you can consult with an attorney in your area and have them specifically explain NV's position on an revoking an ex-spouse's right to collect.


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