The Law Office of Rajeh A. Saadeh, L.L.C.
The Right Lawyers Make a Difference

Divorce-related beneficiary question works its way up to SCOTUS

Here's a hypothetical -- actually a real-life situation that occasionally plays out for divorced spouses across the country -- relevant to beneficiary designations in life insurance policies.

Imagine that one spouse lists his or her married partner as a beneficiary (a common outcome, obviously). The couple later divorces, but the policyholder fails to remove the former spouse as a beneficiary. When it comes time later in life to make payment under the policy, the ex-spouse, currently widowed partner and adult children all make claims on the money.

Who prevails?

That can make for a sticky question regarding a revocable insurance policy, especially when evidence suggests that a policyholder simply forgot to remove a former spouse as beneficiary under a policy and never intended for that person to collect any money from it.

The United States Supreme Court recently decided to take a case addressing that subject, following one state's legislative decision to automatically revoke a spousal beneficiary designation upon marital dissolution. In that state, a man who divorced his wife failed to remove her as a beneficiary. Following his death, she and his adult children both made policy claims.

The specific question the high court is considering is whether a designation in a policy predating such a legislative determination can be retroactively revoked or stands independently as a validly executed contract?

The court is stepping in following a federal appellate court's ruling that reversed an earlier court outcome in favor of the children in its decision to let the former wife collect.

The case will certainly be watched with interest by family law commentators across the country. As one media report on the matter notes, many states have "revocation-upon-divorce" statutes that bar ex-spouses from making beneficiary claims.

Any New Jersey resident seeking clarification of the current law in New Jersey can contact an experienced Middlesex metro area family law attorney.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Tell us how we can help

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

brand image

50 Division Street, Suite 501
Somerville, NJ 08876

Phone: 908-864-6889
Fax: 908-301-6202
Somerville Law Office Map