Protect The Estate’s Rights in Life Insurance After Divorce

One of the tasks that you will have to complete as Executor or Administrator of a probate estate in The Woodlands is collecting life insurance that is payable to the estate as a result of the deceased’s death. It may sound simple enough, but if your loved one was divorced and never updated their life insurance beneficiary designation the situation can be a lot more complicated and not having a Woodlands Probate Attorney to guide you through the applicable legal requirements could result in the estate losing life insurance proceeds that it should have received.

Part of the Texas Family Code makes a life insurance beneficiary designation in favor of the insured’s former spouse ineffective after a decree of divorce when certain requirements are met. Some people through neglect or intentional reliance on this provision fail to update their life insurance policy beneficiary designation after getting divorced and when they pass away there may be one or more life insurance policies that name their ex-spouse as beneficiary. What happens?

As you can imagine, when a life insurance company receives proof of the insured’s death they begin the process of paying the proceeds to the beneficiary that is named in their records. And this usually happens fairly quickly, in a matter of days or weeks rather than months. If nobody informed the insurance company that the insured was divorced and the beneficiary designation on their records is no longer legally effective they can end up paying the proceeds to the ex-spouse and the estate may not be able to recover from the life insurance company.

The law does provide a procedure for protecting the estate from a life insurance company paying the proceeds to the ex-spouse. To take advantage of this procedure work with an experienced Woodlands Probate Attorney now and do not risk losing valuable estate assets by doing nothing. After the insurance company pays out the proceeds to the designated beneficiary the estate may lose its claim against them unless specific statutory requirements are satisfied to preserve a claim against them.