Who Gets The Life Insurance Money If An Ex-Spouse Is Listed As Beneficiary?

Listen as John V. Tucker describes how life insurance money is distributed when an ex-spouse is listed as the beneficiary.

Beneficiary disputes are common life insurance claims. You first need to understand what type of insurance your spouse purchased. Was it private? If so, private policies are governed by state law, and state laws all vary. Some states have laws that protect the new spouse, while some maintain that the old spouse still receives the money. You’ll need an attorney who is familiar with your state’s laws.

If your spouse’s plan was purchased through an employer’s plan, then it’s an ERISA plan. ERISA is the Federal Benefits Plan and these tend to have peculiar rules. One such rule is that the administrator only has to look at who is listed on the form, and that’s who gets the money. If certain steps aren’t taken, then the money may be paid to the estate. In some cases, the money may still be paid to the ex, but will later need to be distributed to the new spouse.

Since distribution of money for life insurance policies depends on where the policy was bought, hiring an attorney well versed in insurance law will be very helpful to you. Watch the video to learn more.

If you have additional questions regarding your life insurance case, I want you to call me at (866) 233-5044. I welcome your call.

Video Transcript

Your spouse died but their ex is listed as the beneficiary on their life insurance. Who gets the money? I'm John Tucker, I've represented people like you against insurance companies for over 25 years. Disputes about beneficiaries are actually very common in life insurance and I want to give you some information that will help you understand how the money is going to get distributed.

First, how did your spouse have the insurance? If they bought a private life insurance policy compared to buying insurance through their employer's group life insurance plan, it can change how the money is distributed. Private policies are governed by state law. State laws are different, each of the 50 states actually has different laws that apply to life insurance.

In some states, there are laws to protect a new spouse when there is a divorce. In Florida, for instance, the legislature has passed a law that actually eliminates the rights of a previous spouse after a divorce in life insurance cases in certain circumstances. In Michigan, their States Supreme Court has held that when a spouse gets divorced and waves their claims to assets they actually wave their claim to life insurance as well. So it depends on your state's particular law and you need an attorney that is familiar with that state's law.

If the policy was bought through the employer, that’s an ERISA plan. ERISA is the federal employee benefits law and ERISA has some very peculiar rules compared to state insurance laws. One of the most important is fairly straightforward. A beneficiary designation form that is used by a group life insurance plan is all the administrator has to look at. So the person who is listed on that form typically gets the money but all the eyes had to be dotted and all the t's had to be crossed when any beneficiary change was made to name that person on the beneficiary form.

There are procedures in the ERISA plan at the employer that describe exactly what a person needs to do to name somebody as the beneficiary, even if it's the very first beneficiary they name under the plan and if all the procedures weren't followed that person can't get the money and the funds may go to the person's estate. Even in ERISA situations in those cases that arise in states, like the ones I talked about in Florida and Michigan, the money may get paid to be ex-spouse but the state's law may require that the money then be distributed to the new spouse. It totally depends on where the policy was bought in those situations so having an attorney can be crucial, one that understands life insurance cases.

You're probably watching this video because you have questions about a life insurance claim. I want you to pick up the phone and call the number on your screen. Let's talk about your claim. I help people like you every day. I'm John Tucker. Thank you for taking the time to watch.