One of the chaotic tasks that must be performed in the event of a divorce is the sorting of life insurance, which is often overlooked. In the midst of the struggles for childcare, the distribution of assets, the search for a new home, ensuring that children adapt as well as possible and generally getting used to individual life to discover what to do with life insurance, it is sometimes left out. If marriages break down, couples would generally enter into a separation agreement on matters such as custody of the children. Family allowances can be granted as beneficiaries of an ex-spouse`s life insurance. In the event that the ex-spouse (“father” as an illustration) never updated his policy to meet the needs of his child from his previous marriage and the father died unexpectedly, questions about the father`s right to the proceeds of life insurance would arise. On the one hand, we have the child or the child`s mother who claim that the product must be returned to the child under their separation agreement and, on the other hand, we can have the father`s new family who says that the income is part of the estate or, more complex, that the proceeds are returned to the beneficiary currently cited. Maybe that person is a new spouse. The problems are many, but the first visit to the client is how to apply the child care provision in the separation agreement. Divorced couples must recognize that beneficiary names appear in many places, including, to name but a few, bank accounts, deeds and, of course, retirement plans.
Qualified pension plans generally require a copy of the portion that is sold as a beneficiary. Therefore, separation agreements must indicate that the parties cooperate in signing recipient designations and agree that the parties may change beneficiaries, unless they wish to retain each other`s beneficiaries. However, as Diana Parker has learned, it may not be sufficient, as a beneficiary, to have a specified written agreement (or indication in the separation agreement) to meet the recipient`s right to the “product.” If the father refrains from updating his policy despite a thorough request, counsel may wish to obtain a court order to order an amendment to the designated beneficiary in order to comply with the separation agreement. A word to the wise: add this provision to your separation agreement. Wills can be changed at will; beneficiaries` securities may be subject to appeal. The separation agreement is in place. In the case of Moore v. Sweet, the newly separated woman and Mr. Moore agreed that Ms. Moore remain the beneficiary of Mr. Moore`s life insurance and pay the premiums for that policy. Ms.
Moore was designated as a revocable beneficiary. Unbeknownst to Ms. Moore, Mr. Moore then removed her from the directive and appointed her new partner, Ms. Sweet, an irrevocable beneficiary. After Mr. Moore`s death, Madam