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How divorce affects your spouse’s status as your beneficiary

On Behalf of | Nov 8, 2021 | Divorce

Going through a divorce will force you to deal with many issues you’ve likely never considered. Child custody, spousal support and property division are common problems that must be dealt with. One issue that doesn’t come up as often is how the divorce will affect your designation of beneficiaries. But it’s an important one because, in some cases, those designations are automatically revoked when the divorce is finalized.

How divorce can impact a will

When a married individual executes a last will and testament, it’s very common for them to name their spouse as the executor of their estate, as beneficiary for some or all of their assets, or both. Following a divorce, Texas Estate Code Section 123.001 automatically revokes a provision naming the spouse as executor, preventing them from assuming any fiduciary role designated in the will.

It also revokes any provision of the will naming the former spouse as a beneficiary. The law treats the former spouse as having died before you, even if this is not actually the case. Instead of your assets being distributed according to the terms of your will, any assets intended for your former spouse will be distributed as if you had died intestate.

How divorce can impact a life insurance policy

Married individuals who have a life insurance policy also commonly designate their spouse as its beneficiary. Texas Family Code Section 9.301 automatically revokes this designation. However, the law also describes three exceptions to the revocation. In the divorce decree, the former spouse can be named as the policy’s beneficiary. After the divorce, you can redesignate your former spouse as the beneficiary. And finally, the former spouse is permitted to receive insurance benefits in trust, acting as a guardian of them for your children.