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Can A Court Make You Maintain Life Insurance For Your Ex-Spouse?

Posted By Legal Team | December 5 2022 | Firm News

Life insurance is purchased for many different reasons. These might be used to bury a loved one, or a policy may be in place as a sort of financial inheritance for a loved one. Sometimes, they could be used to pay off debts held by the policyholder.

Often life insurance policies benefit a spouse. This leaves them able to maintain their shared home, pay off some of the marital debt, or even make sure they can live in the style they have been accustomed to during the marriage. But that leaves questions about what happens when a couple divorces.

What Happens to a Life Insurance Policy After a Divorce in Arizona?

If you divorce in Arizona, it is a good idea to take another look at your life insurance policy. The Arizona legislature, in 1995, added a law, the revocation-upon-divorce law. As a divorce is finalized, if the spouse is a beneficiary on a life insurance policy, they are automatically revoked as beneficiaries.

You and your spouse may have been very amicable when you consciously uncoupled. You may still be best friends and very close. If this is the case, you may wish them to remain your beneficiary. If this is the case, you will have to contact your insurance agency to ensure their position as the heir is at once reinstated.

Do not take for granted that your ex-spouse will be able to benefit if you do not redesignate them as heir. No matter how you feel about your former spouse, after a divorce, if your spouse was your beneficiary, now, you do not have one. Once the judge signs your divorce decree, your ex-spouse is no longer entitled to your life insurance benefits. And no one else is either.

So, you must contact your insurance agent to appoint a new beneficiary.

Employer-Provided Life Insurance Policies are a Different Story

Most of the time, if an employer provides life insurance policies for its employees, those benefits are overseen by federal law. Employee Retirement Income Security Act of 1974 (ERISA) keeps the benefits intact even after a divorce. ERISA overrides the Arizona revocation-upon-divorce law.

If you have one of these plans, you may have already altered the beneficiary. But, if you have not and do not want your former spouse to receive your life insurance benefits, you will need to contact the plan administrator from your employer as soon as possible.

Life Insurance as a Condition of Divorce

Commonly, in the case of spousal maintenance or child support, one spouse can be required to keep their former spouse on as the beneficiary of their life insurance policy until their child support or spousal maintenance has been fully paid off. Once the policyholder’s obligations are fulfilled, they may redesignate a beneficiary.

An Arizona Family Law Attorney Can Help

If you find yourself at the end of your marriage and want to make sure your loose ends are all tied, a family law attorney from Arizona can help you. They can offer you guidance on your legal and financial obligations and the best ways to protect yourself and the people you care about. The Law Office of Karen A. Schoenau is ready and waiting to help you with all of your needs while going through these life-altering changes. Reach out today.

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