Dylan W. Greenwood, Attorney at Law PLLC
336-794-6138

A divorce decree is a legally binding document. However, because some of the assets that get divided in a divorce could pass to a beneficiary based on a form filed with the company that holds the asset, it's important to make changes to avoid conflicts later. For example, when someone purchases a life insurance policy in North Carolina, they tell the company whom they would like to receive the money when they die. If the owner of the policy gets divorced and doesn't change the beneficiary, an ex-spouse could receive the money.

There may be exceptions to this rule. If the divorce decree clearly states the ex-spouse is not eligible for the life insurance proceeds, they may not be able to legally claim the money. Unfortunately, since the life insurance company doesn't automatically get a copy of the divorce decree, they may give the money to an ex-spouse if their name is still listed as the beneficiary when a covered person dies.

Recovering the money after it's been given to a former spouse may be challenging and could result in a lengthy legal process. Although it may be possible to dispute the payment to recover the money, changing the form with the insurer could help a family avoid this unfortunate situation.

The Sixth Circuit Court of Appeals ruled on a similar case in 2017 and sided with the beneficiary named in the divorce decree. While there may be precedent to favor the divorce decree, it's important to work with an experienced divorce lawyer to ensure that all the necessary changes are made following a divorce. The attorney may review the assets and divorce decree to advise a client which beneficiary designations should be changed to avoid conflict for loved ones in the future.

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