Divorce and Life Insurance Policies

Every state has their own particular rules guiding the continuation of various beneficiary agreements, such as life insurance, after a divorce. Following is an examination of some of the considerations involved in determining the status of your life insurance policy after your divorce.

Changes in New Jersey Law

Prior to the passage of a law known as N.J.S.A. 3B:3-14, it was the necessary for the owner of a life insurance policy to remove his or her ex-spouse as beneficiary from a life insurance policy if that was so desired. This law now automatically bypasses the divorced spouse so that the next-in-line beneficiary (often times the children) becomes the recipient, even without a formal change in policy. This revocation takes place as soon as a Final Judgment of Divorce is entered.

The exception to this automatic revocation is when the divorce decree includes a property settlement or some other contract which indicates the former spouse as a continued beneficiary. There are times when such an agreement is desired, for instance, as a protection to ensure the continuation of alimony or child support in the event that the paying spouse dies. A consultation with one of our divorce attorneys will provide you with an opportunity to discuss these complex issues.

divorce court

Establishing a New Policy

Another question to be considered is whether it is desirable to establish a life insurance policy as part of a property settlement agreement where one does not already exist. In certain cases this can be a desired safeguard, particularly when children are involved.

What if My Divorce Was Not Filed in New Jersey

Most states do not carry laws similar to New Jersey’s, and so if your divorce judgment was filed outside of the state, the likelihood is that your ex-spouse remains the beneficiary of your policy. Sorting through the maze of what is automatically revoked and what is not can be complicated, but our attorneys specializing in divorce and family law can guide you through it.

What if I Re-marry My Ex-Spouse

It is certainly not unheard of for former spouses to reconcile after a divorce and re-marry each other. In the State of New Jersey, if divorce has automatically revoked an ex-spouse as beneficiary of a life insurance policy and no formal, legal change other than that has been made, if two former spouses re-marry each other, the revoked status is automatically reinstated. In other words, your spouse is once again the legal beneficiary of your life insurance policy.

Let Us Help

Whether you are going through a divorce and need legal advice to guide you through these complicated issues or your divorce is already finalized but you need assistance changing your life insurance policy, contact one of our divorce attorneys for a consultation.