Do you have a life insurance policy on yourself for the benefit of your spouse either through work, personally, or even a bank account? Have you filed for divorce and not reviewed those policies to determine who the beneficiary should be?
Most if not all people have some type of life insurance party and name their spouse as the beneficiary. Later long after a policy is in force, the parties may divorce. You are making changes on accounts and moving forward with your new life. However, you forget to review the beneficiaries of your life insurance and presume that since you are no longer married that your ex-spouse will not inherit your life insurance. That is exactly what happened in the case of Aderholt v. McDonald, from Walker County, Alabama recently.
The parties married 1993 and were divorced in 2004. The Husband, Aderholt, had a $150,000 life insurance policy naming his ex-wife as the beneficiary. Also, Aderholt had agreed to pay alimony for 15 years. Aderholt died in 2014 and his ex-wife filed a claim for the life insurance. Aderholt’s mother, and administrator of his estate, also filed a claim for the insurance stating that she was due to inherit the policy as next of kin and that the divorce vacated the life insurance beneficiary.
The insurance policy was issued by Alfa, and proceeded to pay the money into court. The trial ruled that the ex-wife by law was entitled to the life insurance proceeds. Aderholt’s mother appealed the case and the trial court ruling was affirmed. The appellate court stated that the designation of the beneficiary of a life insurance policy is governed by the of the policy itself. Also, the court noted that a divorce has no impact one spouse’s status as the beneficiary of the other’s life insurance policy.
The important piece of information to learn from this case, is that if you divorce, review all of your life insurance policies to make sure the beneficiary is the one you want to inherit your funds.
As a practical matter, when I represent a divorce client, my office routinely reviews all life insurance policies once the divorce is granted. It is better to be safe than sorry later.
If you are in need of a divorce attorney, contact Ingram Law LLC at (205) 335-2640.