Calabrese Associates, P.C.

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Handling Your Life Insurance During a Divorce

Posted on in Division of Assets

Handling Your Life Insurance During a DivorceGetting divorced in Illinois does not automatically kill your former spouse’s right to benefits from your life insurance policy. You can agree to give your former spouse some benefits in case of your death or choose someone else as your primary beneficiary. If you are responsible for spousal maintenance or child support payments, your former spouse can receive life insurance benefits as compensation for the payments he or she will no longer receive from you. Whatever your decision is, you must take specific action in order to change the division of your life insurance benefits after divorce.

Changing Your Policy

Under Illinois law, a divorce will automatically revoke some beneficiary designations, such as provisions in wills, trusts and power of attorney orders. If you do nothing to your life insurance policy, your former spouse may be entitled to the same benefits as when you were married. In order to change the beneficiary arrangement, you can:

  • Create a written agreement during your divorce that your former spouse will waive his or her right to your life insurance benefits or receive a specified amount in case of your death; and
  • Rename who your beneficiaries are in your life insurance policy and what percentage of the benefits each person will receive.

Legal Battles

It is common for a former spouse and other beneficiaries to argue over how a life insurance policy should be divided. In some cases, the deceased party was not clear about whether the former spouse remains a beneficiary. There can be ambiguity if the deceased party:

  • Never addressed the life insurance policy during or after the divorce;
  • Expressed an intent to change the policy but died before taking action;
  • Signed an agreement to waive benefit rights but did not specifically mention life insurance; or
  • Failed to change the beneficiaries in the policy.

Because Illinois law does not have an automatic mechanism for divorce and life insurance, a court relies on understanding the deceased party’s intentions in dividing the benefits. In order to clearly show your intentions, your benefits waiver agreement can: 

  • Use the words “life insurance” in the text;
  • Include the name and number of the policy affected; and
  • Give explicit instructions.

Life Insurance and Divorce

With all of the marital assets involved in your divorce, you may overlook your life insurance policy. Your emotional inclination may be to remove your spouse as a beneficiary. If you have children, you must consider how your death would affect your spouse’s ability to support them. A Naperville divorce attorney at Calabrese Associates, PC can guide you in establishing how you want your life insurance benefits to be divided. Call 630-393-3111 to schedule an appointment. 


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