Here’s The Details About Life Insurance and Divorce!

When couples get divorced in Texas, one of the most important things their divorce attorneys will counsel them on is identifying and dividing up their marital assets as it is required by the state.

One such asset that divorce lawyers and their clients must discuss is life insurance policies that can be the subject of much disagreement when spouses divorce.

The best way to handle the issue of who will retain the rights to any life insurance purchased by the couple is to work with a divorce law firm experienced in dealing with the dispersal of marital property, including life insurance policies.

Texas Law on Life Insurance Policies In A Divorce

When spouses work through divorce proceedings with their divorce attorneys, it is possible to forget that life insurance policies exist.

As a protection for the spouses who own these policies, the state of Texas does not recognize an ex-spouse as a life insurance beneficiary once the divorce is final.

On the other hand, there are three instances when the family court will recognize an ex-spouse as the beneficiary of a life insurance policy:

If the divorce decree designates an ex-spouse as the beneficiary.
If a spouse and their divorce lawyer re-designate an ex-spouse as a beneficiary after the divorce is complete.
If an ex-spouse has been named to receive benefits in the form of a trust for the couple’s children or dependents.

Problems With Life Insurance Policies In Divorce

Given the fact that the Texas court will not automatically recognize an ex-spouse as the beneficiary of a life insurance policy in a divorce even if previously named as such, divorce law firms end up seeing many disputes arising around this issue.

When there is no legal directive as to who should receive life insurance funds in these instances, even some life insurance companies may not be able to help due to vague language in their policies.

Divorce attorneys find that families frequently end up back in court trying to gain access to this asset when it is not properly designated at the time of the divorce.

Addressing Life Insurance Policies Before Divorce Is Critical

Due to the difficulties that can arise when spouses do not properly address life insurance policies, experienced divorce lawyers strongly recommend that their clients revisit their policies and work out beneficiary issues as part of their divorce negotiations.

It is one of the important parts of the distribution of marital property that must be negotiated and agreed upon beforehand so that the beneficiary of these policies can be legally changed with the life insurance company before finalizing the divorce.

In such cases, divorce law firms can then better assist their clients in drafting a divorce agreement that includes the specific decisions that have been made about the policy for approval by the court.

When a determination has been made about the beneficiary for the policy specifically mentioned in the divorce decree, there can be no future disagreement as to whether an ex-spouse is or is not entitled to those benefits.

An Experienced Divorce Attorney Cam Help

The identification and distribution of marital property are among the more complex issues that divorce attorneys must guide their clients through during their Texas divorce process.

Life insurance policies and negotiating over beneficiaries can get especially contentious, including when spouses fail to change their beneficiaries.

Experienced divorce lawyers can help their clients understand their options with existing life insurance policies and how to properly designate the right beneficiary.

Contact an experienced Texas divorce law firm for help with life insurance and other marital estate issues when filing for divorce.