Revising beneficiary designations after divorce

On Behalf of | Jun 25, 2018 | Property Division

Texas divorcees should make sure that their beneficiary designations and other estate planning documents have been revised if they do not want an ex-spouse as a beneficiary. It is not uncommon for people to sign a divorce decree in which the spouse agrees to relinquish certain assets but forget to remove the spouse from those assets. In at least one court case, a court ruled that the divorce decree in which a man left his life insurance policy to his daughter overruled the beneficiary designation that still named his uncle. However, the process of correcting this type of error can be a long and expensive one.

In another case, one man signed a divorce decree with his ex-wife in which she relinquished her claim to his life insurance policy. However, the man did not change the beneficiary on the plan, and he died without leaving a will. The ex-wife got the funds, and the surviving family has been unable to locate her.

Because she signed the divorce decree agreeing to relinquish the policy, it may be possible to pursue the case in court. However, in addition to the difficulty of locating her, there is also no guarantee that she has not already spent the money or that it has not been hidden somewhere.

While divorce can be an emotional time, it is important to remember that it is primarily a legal process. Therefore, it is important to take care of details such as making sure to revise all necessary paperwork. It might not be possible to make changes to an estate plan, including a beneficiary designation, until the divorce is final. Furthermore, because Texas is a community property state, all property acquired since marriage may be considered shared property. People should not use assets beyond what is necessary, sell them or close joint accounts without consulting an attorney.