Going through a divorce is never easy. It can take an emotional toll on you and you’ll have to deal with issues you may never before have considered. Common issues will come up with respect to child support, alimony and property division, and these areas can become complex to work through. One thing which isn’t discussed as much is life insurance policies and what happens to them as a result of the divorce.
Revocation upon divorce
For married couples who have life insurance policies, it’s very common to name their spouse as the beneficiary of their policy. However, Virginia Code Section 20.111.1 ends this designation, if it exists. As soon as a final divorce decree is issued, the law automatically revokes the former spouse’s role as the policy’s beneficiary. Generally speaking, the former spouse no longer has any claim to proceeds from the life insurance.
The idea behind the law is that holders of a policy tend to forget to update their beneficiaries following a divorce. It assumes the spouse would intend to remove their former spouse from the policy. But sometimes a spouse would prefer to keep their ex-spouse on the policy. When this is the case, they have options. They can either sign an agreement at the time of the divorce, maintaining the other spouse as beneficiary, or the ex-spouse can be redesignated as beneficiary once the divorce is complete.
It’s important to note that a family court has the authority to order a spouse to maintain an existing policy, under some circumstances. If one spouse is ordered to pay support for the other, and the court determines the other spouse needs additional security, continuing the life insurance policy and leaving the ex-spouse as beneficiary can provide the necessary support.