Transferring Personal Property Between Spouses – Life Insurance

Transferring Personal Property Between Spouses  – Life Insurance

Transferring Life Insurance – This is the third installment of a five-part blog series on transferring personal property between divorcing spouses. The first blog discussed the steps involved in transferring ownership of financial instruments (i.e. bank accounts, etc.) while last week’s blog dove into transferring ownership of a vehicle.

Remember: Transferring personal property between divorcing spouses is not as simple as handing that property over to your spouse and walking away. Perhaps the property in question is in your name only, or in the name of both spouses. Maybe the property has a lien against it.

Whatever the case, additional steps must be taken to have a clear transfer of ownership.

If you missed the previous two blogs, you can read them here:

https://nelsonlawgrouppc.com/transferring-personal-property-spouses-financial-instruments/

https://nelsonlawgrouppc.com/transferring-personal-property-spouses-vehicles/

This week’s topic: Transferring life insurance

Similar to other personal property, a certified copy of the divorce decree should be sent to the life insurance provider to transfer ownership of a life insurance policy. The address of the spouse awarded ownership should also be included.

With that being said, the Texas Family Code clearly states that if the court has ordered a spouse to maintain the other spouse or a child as a beneficiary of the insurance policy, the spouse who was awarded the beneficiary interest should send a certified copy of the decree to the insurer as soon as possible and request a change-of-beneficiary form.

Under the beneficiary designation statute, an earlier designation of a spouse as a beneficiary of a policy is not effective after a divorce or annulment unless:

1. The decree designates the insured’s former spouse as the beneficiary
2. The policyholder re-designates the former spouse as the beneficiary after rendition of the divorce decree, or
3. The former spouse is designated to receive the proceeds in a trust for, on behalf of, or for the benefit of a child or a dependent of either former spouse.

The insurance carrier is not liable for paying the proceeds of the policy to the named beneficiary if the carrier does not receive written notice of the beneficiary designation in the decree.

Note: Some employer-provided insurance policies are not subject to the beneficiary re-designation statute, because they are either governed by the Employee Retirement Income Security Act (ERISA) of 1974 or the Federal Employees’ Group Life Insurance Act (FEGLIA) of 1954. In other words, a plan administrator in these specific circumstances is required to pay the benefits according to the plan documents, not the divorce decree.

Next week’s topic: Transferring livestock

Please don’t hesitate to check our blog archive for more information on this topic or any others that might interest you. And if you would like us to discuss a particular family law topic in these blogs, please contact our Nelson Law Group, PC office to let us know. We will be glad to help you. Transferring Life Insurance