Who Gets Life Insurance Proceeds?

Virginia has a statute that a spouse’s designation of the other spouse as a beneficiary in a life insurance policy is not valid if the husband and wife divorce. It goes further and provides that if the designation is not changed after a divorce and the insurance company pays the divorced spouse the benefits, the divorced spouse is liable to the current beneficiaries (usually the new life) for the benefits that they received. Texas has similar statutes.

In April 2013, the United States Supreme Court was asked by an ex-wife to declare that the Virginia statute was preempted by federal law where the life insurance policy was part of a federal workers employment benefit. In that case, the husband had named his wife as the beneficiary of his federal life insurance policy. He and his wife got divorced and he remarried but forgot to change the beneficiary designation to his new wife. When he died, his new wife claimed that she should be entitled to the proceeds of the policy based on the Virginia law that divorce nullifies a designation in favor of the divorced spouse. The Supreme Court held that the Virginia law was preempted by federal law which provided that the insurance policy would be paid to the designated beneficiary. The divorced spouse received the benefits as a result ot the ruling.
It is important that you keep the beneficiary designations in your insurance and financial accounts up to date. If you don’t, your accounts or insurance proceeds may go to someone that you do not intend that they go to. No. 11-1221.

Copyright by Robert Ray a Texas inheritance attorney. The foregoing information is general in nature and does not apply to every fact situation. If you are concerned about inheritance laws, inheritance rights, have a family inheritance dispute, a property dispute or want information about contesting a will and need an inheritance lawyer, we can help. Please go to our main site www.texasinheritance.com and use the contact form to contact us today. We are Texas inheritance lawyers and would love to learn about your case and there is no fee for the initial consultation.

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