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Life insurance in Texas after a divorce

On Behalf of | Feb 10, 2021 | Divorce |

If you have a life insurance policy and you are going through a divorce, it may be easy to forget to remove his or her name from your policy afterward. In some states, this can have devastating effects if you pass away and your ex-spouse is still a beneficiary on your life insurance. 

Texas has special provisions, however, to ensure that your ex-spouse only receives the payout from your policy under certain circumstances. 

The divorce decree names your ex-spouse as a beneficiary

During divorce proceedings, you may wish to keep your ex-spouse as a beneficiary on your life insurance for any number of reasons. You can include this request in your divorce decree and the eventual payout will go to your ex-spouse. 

According to FindLaw, if the decree does not mention this provision, your ex will not receive any funds, even if you do not remove them from your policy. 

You reinstate them as a beneficiary

If you wish, you may reinstate your ex-spouse as a beneficiary on your insurance post-divorce. Otherwise, in the absence of a specific demand in the divorce decree, he or she will see no proceeds from your life insurance policy. 

Your ex receives the benefit on behalf of your beneficiary

If you designate one of your children as a beneficiary of your insurance policy, your ex-spouse may receive those funds under the following conditions: 

  • The child is still a minor 
  • Your ex-spouse is the legal parent to the child 

As opposed to paying out the proceeds to the child, they will go to the other parent to manage. 

If you forget to change your beneficiary at all, Texas law states that your ex-spouse will not automatically receive the proceeds.