It’s generally safe to assume that most divorced men and women do not want their ex-spouse to be a beneficiary of their estate at the time of their death. Illinois law agrees and for decades it automatically revoked beneficiary designations in wills and trusts to spouses at the time of divorce. But it wasn’t until 2019 that Illinois began automatically revoking life insurance beneficiary designations to former spouses. This change in Illinois law is not well known and could have unintended consequences for your or your former spouse.
The automatic revocation of life insurance beneficiary designation of spouses after divorce is meant to prevent an unintended windfall to a former spouse years after the divorce. This makes sense. Individuals frequently forget to make changes and updates to their estate plans following their divorce. Without automatic beneficiary revocations, the failure to update estate plans could leave intended beneficiaries, like children and new spouses, out of luck.
Life insurance is unlike other property. Life insurance proceeds are traditionally intended to protect those dependent on the deceased’s income. After a divorce, it’s common for financially dependent spouses to continue to receive support through alimony payments (now called spousal support in Illinois) and minor children to receive financial support through child support payments. Family law judges typically order spouses with support obligations to insure those obligations with life insurance so the former spouse and children are protected. For these reasons, the legislature historically deemed it unnecessary to impose an automatic revocation.
If you want your former spouse to remain the beneficiary of your life insurance following your divorce, then you have two choices. First, you can state your desire in your Judgment for Dissolution of Marriage. Judges frequently do this anyway. Your intent to provide insurance for your former spouse should also be included in your marital settlement agreement provided you have one. Second, you can redesignate your former spouse as your life insurance beneficiary after your divorce. Contact your insurance company to update your beneficiaries after the date of your divorce. Even if redundant, this is probably the best practice.
If either you or your spouse does not have a good divorce attorney representing your best interests, insurance beneficiary designations can easily get overlooked especially since it’s a step that may need to happen after the divorce is finalized. If you have questions or concerns about making sure your life insurance beneficiaries are appropriate after your divorce, please feel free to contact us.
Goodman Law Firm is a trusted Oak Brook, Illinois divorce law firm, and we understand the delicacy of your situation and are committed to helping you find the best path forward for you. For more information, please don’t hesitate to contact us today.
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