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5 Reasons to Look Over Your Insurance Policies After a Divorce


Always review the named beneficiaries on all your accounts after a divorce. This case is an appeal from Jefferson County Alabama domestic relations court related to an insurance policy. In the case of Kowalski v. Upchurch, the trial court ruled that the son of the divorced parents was to receive the money proceeds from an annuity policy.

The Appeals court overruled the trial court and held that the former Husband was entitled to receive the annuity contract proceeds, although the former Wife was awarded all interest in insurance policies in her name. The Wife failed to change the name of the beneficiary to her son on the annuity policy after the divorce.

The parties were originally divorced in June, 2011. The Wife had an annuity policy before the marriage with Ohio National Life Insurance Company. Originally, the Wife had her son listed as the beneficiary on the policy. The Wife made her Husband the primary beneficiary in October, 2008.

In March, 2013, the Wife died and both the former Husband and the son filed claims for the annuity. Ohio National Life Insurance Company filed a declaratory judgment action for the court to decide who should receive the proceeds. The former Husband filed a motion for summary judgment contending that he was entitled to the proceeds as a matter of law.

The trial court ruled in favor of the son to receive the annuity proceeds, which amounted to approximately $31,906. The former Husband appealed the decision and the Court of Appeals reversed the decision in favor of the Husband.

In this divorce case, the settlement agreement of the parties, which was later incorporated into the decree of divorce, stated that the parties were each awarded all items of property in his or her name, including “insurance policies.” The Court held that while the former husband could not have asserted a claim of ownership as to any policy of insurance owned by the insured as of the date of their settlement agreement, the ownership rights and the rights as a beneficiary were two separate and distinct things. “A beneficiary interest arises out of a contractual and not a marital relationship.”

The separation agreement never addressed the former husband’s right to future proceeds as a result of the insured’s beneficiary designation under the annuity policy. The Wife did not act to either cancel the annuity or change the beneficiary.

This is a situation in which the Wife failed to change the policy after she was divorced. In the event the Wife had changed the beneficiary, then this entire case could have been prevented. I agree with the court’s decision legally, but it is sad that the son will not receive his inheritance in this case. I always instruct clients to change all life insurance policies once a divorce decree is entered and review all financial accounts as to the named beneficiaries of policies. It is not uncommon to have small life insurance policies tied to a checking or savings account with your bank. I had an experience recently where one individual had life insurance of over $100,000 with several different companies and banks. Let me help you make sure you are taking care of all aspects of completing your divorce case. I can help you get the relief you are entitled to. Call Joseph Ingram with INGRAM LAW LLC at (205) 335-2640. Get Relief – Get Results.


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