Make sure if certain changes occur, that you update your policies!
Many people set up their beneficiary designations on their life insurance policies or financial investments and don’t think about it again. However, if significant life changes occur, such as a death or divorce, it’s a good idea to review your beneficiary designations to see if they are still the ones you want.
For example, what happens when someone gets a divorce and fails to take the ex-spouse’s name off their insurance policy? When they pass away, their ex-wife or ex-husband could receive their death benefit, instead of their children.
I had this question come up recently. A father passed away, and the children contacted the insurance company to claim their death benefit—only to discover that the beneficiary on their Dad’s policy was his ex-wife. Even though they had been divorced over 20 years ago, he had never changed the beneficiary designation so that it would go to his children. The children called me to find out if there was anything that could be done.
Luckily for them, Idaho is one of about half of the states that has a revocation-upon-divorce statute that automatically revokes an ex-spouse’s designation as a life insurance beneficiary upon divorce. Idaho code § 15-2-508 revokes a pre-divorce life insurance policy as well as a gift to an ex-spouse in a Will or gifts in a Living Trust.
In conclusion, it’s wise to review your beneficiary designations on life insurance policies or other financial investments to make sure they are consistent with your intentions and there are no surprises in the future.
View our “Senior’s Guide to a Well-Planned Future” on our website! Packer Elder Care Law-with you for life!
Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.