Believe it or not, your former spouse may still receive your life insurance benefits, instead of your current spouse, when you die. Although the idea that someone you divorced years ago might receive your life insurance benefits, instead of the person to whom you are currently married, seems rather nonsensical, the law does not always adhere to common sense.
Why does this occur? When a couple gets divorced there are a great many thoughts and turbulent emotions swirling around in one’s head, as well as reflections upon past good times, so it becomes easy for some things to slip through the cracks. One thing that often slips through the cracks is to change the name of the designated beneficiary listed on life insurance policies, a will, trusts, IRAs, 401(k) accounts, etc. If this occurs – and it certainly has – the court has no other option than to uphold the document as it is written. With the U.S. economy in its current state of decline, more and more people are turning to do-it-yourself divorce kits in an effort to save money. But there is too much at stake in the divorce to look for the sweetest deal, and, because of this trend, it is likely that the number of former spouses receiving benefits over current spouses will go up in the years to come.
How can you prevent this? The best way is to consult an experienced and qualified estate planning attorney as soon as possible.