If you're the policyholder and won't be supporting your ex after the divorce, you might be able to remove them. But if you have to pay alimony or child support, you may have to keep them as a beneficiary. Consult your divorce lawyer to determine if it's possible to remove your ex from your policy.
If you are a resident of certain states, you may be required to list your spouse as your primary beneficiary and designate him or her to receive at least 50 percent of the benefit. In some states, you can name someone else with your spouse's written permission.
A life insurance policy also sets out rules about what happens when there is no named beneficiary. In many policies, the surviving spouse automatically receives the life insurance proceeds when no beneficiary is named at the time of the insured's death. In others, the money goes to the estate of the insured.
In many states, you have the option to exclude your spouse from your car insurance policy, but some states will only allow it for certain reasons like not having a license or already having a policy. Finally, other states will not allow you to exclude family members, so your spouse will be covered automatically.
It is common for both spouses to be insured, although not required. Several types of policies are available, including: Term life insurance: Term life insurance covers a specific period, such as 10, 20, or 30 years. It offers a death benefit if the insured person dies within the term.
Many health plans do not even allow one spouse to drop the other without a court order. Some require proof that the spouse is covered by another health care insurer. Depending on the plan, even if it is allowed, the spouse cannot be dropped until the next enrollment date.
Life Insurance Purchased During Marriage in One Party's Name is Community Property in a Divorce. California is a community property state. That means that all property acquired during a marriage is presumed to be community property.
In most cases, a spouse cannot directly override a beneficiary designation on a bank account. The designated beneficiary will receive the funds regardless of the spouse's wishes unless the account holder changes the beneficiary designation before their death.
Ineligible Beneficiaries: Minors: Generally, minors (individuals under the age of 18 or 21, depending on the jurisdiction) cannot be named as direct beneficiaries of a life insurance policy. In such cases, a trust or custodian may be designated to manage the proceeds until the minor reaches the age of majority.
If you do not designate a beneficiary, your spouse automatically inherits your 401(k) upon your death.
If there is no spouse the benefit will be paid, in equal shares, to your surviving children; if none, then to your parents; if none, then to your siblings; if none, then to your estate. The same process would be followed if your designated beneficiary is no longer living at the time of your death.
A will won't supersede the beneficiaries listed on a life insurance policy. In most cases, the beneficiary listed on the life insurance policy has the right to claim the payout regardless of the instructions in the will.
If you are married, by law, your spouse must be named as the beneficiary. If you enter someone else, marital laws will take precedent and your spouse will receive the asset anyway. The only way around this is to get your spouse to sign a waiver.
Update your beneficiaries
Couples often name each other as beneficiaries on financial accounts like retirement plans and life insurance policies. If no children are involved, you can usually call your insurance company and ask them to remove your ex-spouse as a beneficiary.
For example, California and Nevada recognize domestic partnerships. As such, you can add a domestic partner, such as a boyfriend or girlfriend, to your health insurance. If you have employer-sponsored insurance, you will need to provide your employer with the document recognizing your domestic partnership.
While some marital assets pass by default to the surviving spouse, some assets pass to the surviving spouse by way of beneficiary designations. There are two types of designations: payable-on-death (POD) designations and transfer-on-death (TOD) designations.
In community property states, a spouse is automatically considered the life insurance beneficiary unless they indicate explicitly otherwise in the policy.
You can name any person—your spouse, parents, siblings, friends, or other loved ones—as life insurance beneficiaries.
If you are married or in a common-law relationship of more than two years, your spouse is automatically your beneficiary.
Whole Life Insurance is Almost Always Considered a Marital Asset.
The Working Spouse Rule means a spouse of an employee may not use our health insurance plan as the primary coverage if the spouse works, is eligible for health insurance coverage through his/her employer, and the employer pays at least 50% of the total premium for “employee only” or single coverage.
A medical divorce, therefore, is a strategic maneuver to recalibrate financial eligibility for crucial healthcare benefits. Essentially, it can protect one spouse from being financially harmed by healthcare expenses.
*What is Spouse Equity? Spouse Equity is a provision of Federal Employees Health Benefits (FEHB) law that allows the former spouse of a Federal employee or annuitant to enroll in FEHB if he or she meets certain requirements.