Life insurance serves as a cornerstone of responsible financial planning, offering a crucial layer of security for individuals and their families. This financial tool promises support for loved ones in the event of an unexpected passing, providing a safety net during emotionally and financially challenging times. However, life circumstances can change dramatically, and few life events carry as significant an impact as divorce. The dissolution of a marriage can have profound implications for various aspects of one's life, including previously established beneficiary designations on life insurance policies. Navigating these implications is paramount to ensuring that your life insurance benefits are ultimately directed to the individuals you intend to protect.

The legal framework surrounding life insurance and divorce is intricate, characterized by a complex interplay of state and federal regulations. Laws governing the automatic revocation of a former spouse as a life insurance beneficiary upon divorce differ considerably across the United States. Furthermore, federal law, specifically the Employee Retirement Income Security Act of 1974 (ERISA), introduces another layer of complexity, particularly concerning life insurance plans offered through employment. Understanding these nuances is not merely a matter of legal compliance; it is fundamental to safeguarding the financial future of your loved ones and ensuring your wishes are honored. Dorian Law P.C., a nationwide firm dedicated to championing the rights of individuals in insurance matters, offers this guide to illuminate the often-confusing landscape of life insurance beneficiary revocation upon divorce.

Defining "Revocation Upon Divorce": What Happens to Your Ex as a Beneficiary?

The term "revocation upon divorce" refers to a legal principle that, in many states, automatically cancels a former spouse's designation as the beneficiary of a life insurance policy once a divorce is finalized. In essence, the law in these jurisdictions presumes that individuals generally do not intend for their former spouses to receive life insurance proceeds after the marital relationship has ended. This legal mechanism steps in to override the existing beneficiary designation on the policy, treating the ex-spouse as if they had already passed away before the policyholder.

Consider a scenario where an individual, Mark, named his wife, Emily, as the beneficiary of his life insurance policy. Several years later, Mark and Emily undergo a divorce. If Mark resides in a state with a "revocation upon divorce" law that applies to life insurance, the legal termination of their marriage would automatically nullify Emily's status as the beneficiary of Mark's policy. This occurs by operation of law, meaning it happens regardless of whether Mark actively updates the beneficiary form with his insurance company.

Currently, a notable number of states have enacted statutes that mandate the revocation of beneficiary designations for non-probate assets, which often include life insurance policies, upon divorce. These states operate under the assumption that most individuals would not want their death benefits to enrich a former partner after the marriage has ended. However, it is crucial to recognize that in the absence of such a statute, or if a state's specific law does not extend to life insurance policies, the former spouse may remain the beneficiary if the policyholder fails to take the necessary steps to change the designation. This highlights the importance of understanding the specific laws of your state and taking proactive measures to update your beneficiary designations after a divorce to accurately reflect your current intentions. The U.S. Supreme Court case Sveen v. Melin further affirmed the legal standing of these state laws by upholding the constitutionality of a Minnesota statute that automatically revokes a divorced spouse as a life insurance beneficiary. This ruling underscored the Court's recognition that such statutes generally align with the presumed intentions of policyholders following a divorce.

Understanding State Laws: A Comprehensive Guide to Revocation Upon Divorce

The legal landscape concerning the revocation of life insurance beneficiaries upon divorce is characterized by significant variations across the United States. While many states have adopted some form of automatic revocation, the specifics of these laws, including the types of policies covered and any exceptions, can differ substantially. Additionally, a considerable number of states do not have statutes that automatically revoke a former spouse as a beneficiary, placing the onus on the policyholder to initiate the change. The following state-by-state guide provides a detailed overview of how each jurisdiction handles this critical issue:

ERISA and Life Insurance: A Different Set of Rules

It is essential to understand that the state-specific "revocation upon divorce" laws discussed previously generally do not apply to life insurance plans governed by the Employee Retirement Income Security Act of 1974 (ERISA). ERISA is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. A key aspect of ERISA is that it often preempts state laws that "relate to" employee benefit plans, including life insurance offered through an employer.

Under ERISA, plan administrators are generally required to administer the plan according to the plan documents. This includes following the beneficiary designation form that the employee has on file with the plan administrator. Therefore, even if a state has a "revocation upon divorce" law that would automatically remove a former spouse as a beneficiary of a non-ERISA life insurance policy, this law typically would not apply to a life insurance policy provided as an employee benefit governed by ERISA. In such cases, the beneficiary designation form will usually dictate who receives the death benefits. The U.S. Supreme Court case Egelhoff v. Egelhoff firmly established this principle, holding that ERISA preempts state laws that automatically revoke an ex-spouse's beneficiary designation in an ERISA-governed plan upon divorce. Consequently, it is critically important for individuals with ERISA-governed life insurance to actively update their beneficiary designations after a divorce if they intend to remove their former spouse. Relying solely on state law for automatic revocation in these situations can lead to unintended outcomes.

The Role of Qualified Domestic Relations Orders (QDROs) in ERISA Plans

A Qualified Domestic Relations Order (QDRO) is a specialized type of court order, typically issued in divorce proceedings, that recognizes the rights of a former spouse to receive a portion of the retirement benefits accrued by their former spouse under an ERISA-governed plan. While QDROs are most commonly associated with the division of retirement accounts such as 401(k)s and pensions, they can also play a role in determining the beneficiary of life insurance benefits provided through an ERISA-governed plan.

A QDRO can be specifically drafted to mandate that a former spouse remains the beneficiary of an ERISA life insurance policy. This is often used as a mechanism to secure financial obligations outlined in the divorce decree, such as alimony payments or child support. For instance, a divorce decree might require one spouse to maintain a certain amount of life insurance coverage with the former spouse named as the beneficiary until child support obligations are fulfilled. A QDRO can formalize this requirement within the context of an ERISA-governed plan, ensuring that the life insurance benefit will be paid to the former spouse under the specific conditions outlined in the order. However, it is crucial to note that without a QDRO that explicitly addresses the life insurance beneficiary, the beneficiary designation form on file with the ERISA plan administrator will generally control the distribution of death benefits, even if state law would otherwise dictate a different outcome due to a "revocation upon divorce" statute.

ERISA vs. Non-ERISA: Key Differences in Handling Beneficiary Designations After Divorce

Understanding the distinction between ERISA-governed plans and non-ERISA life insurance policies is crucial when navigating beneficiary designations after a divorce. Here are the key differences:

ERISA-Governed Plans:

• Federal law (ERISA) generally takes precedence over state "revocation upon divorce" laws.

• Beneficiary designations are primarily governed by the plan documents and the most recently filed beneficiary designation form.

• A Qualified Domestic Relations Order (QDRO) is typically required to deviate from the filed beneficiary designation, often used to ensure a former spouse remains a beneficiary for purposes such as securing alimony or child support.

Non-ERISA-Governed Life Insurance Policies:

• State laws, including any applicable "revocation upon divorce" statutes, are the primary determinants of beneficiary status after a divorce.

• Automatic revocation of a former spouse as beneficiary may occur by operation of state law, depending on the specific jurisdiction.

• The policyholder needs to actively and directly update their beneficiary designations with the insurance company to reflect their post-divorce intentions.

Important Considerations and Next Steps After a Divorce

Regardless of the specific laws in your state or whether your life insurance policy is governed by ERISA, it is strongly recommended that you take proactive steps to review and update your beneficiary designations immediately following a divorce. This simple act can prevent significant complications and ensure that your life insurance proceeds are distributed according to your wishes.

Begin by carefully examining the terms and conditions of your life insurance policy. Understand who is currently listed as the beneficiary and what the policy requires for changing this designation. Next, thoroughly review your divorce decree or marital settlement agreement. These legal documents may contain specific provisions regarding life insurance, potentially requiring you to maintain coverage for a former spouse or children.

Consulting with a qualified family law attorney or an experienced insurance professional is highly advisable. They can provide personalized guidance based on your specific circumstances and the applicable laws in your jurisdiction. Remember that updating beneficiaries is not limited to life insurance policies; it is equally important to review and update designations for retirement accounts, annuities, and other financial assets after a divorce. Finally, consider whether life insurance can be a valuable tool in securing alimony or child support obligations as part of your divorce settlement.

State/D.C.

"Revocation Upon Divorce" Statute for Life Insurance?

Statute Citation

Key Considerations and Potential Exceptions

Alabama

Yes

AL Code § 30-4-17

Effective September 1, 2015. Applies prospectively. Exceptions if the divorce decree or settlement agreement provides otherwise, or if the former spouse is the owner or pays premiums.

Alaska

Yes

Alaska Stat. § 13.12.804

Covers non-probate transfers including life insurance. Exceptions for express terms in governing instruments, court orders, or marital settlement agreements.

Arizona

Yes

A.R.S. § 14-2804

Automatically revokes beneficiary designations of an ex-spouse and their relatives in various documents, including life insurance. Exceptions for express terms in the divorce decree. Federal law (ERISA) may preempt state law for retirement accounts.

Arkansas

Yes (for wills)

AR Code § 28-25-109 (wills)

Revocation upon divorce statute applies to wills, treating the former spouse as predeceased. Unclear if it extends to life insurance beneficiary designations automatically based on snippets. Further research needed.

California

No

Cal. Prob. Code § 5600-5604

Life insurance beneficiary designations are NOT automatically revoked upon divorce. Requires policyholder action, divorce decree provision, or insurance contract terms. Community property laws may affect life insurance purchased during marriage.

Colorado

Yes

C.R.S. § 15-11-804

Divorce revokes beneficiary designations to the former spouse, treating them as predeceased. Exceptions for agreements, court orders, or ERISA-governed plans. Insurance companies are protected if they pay before receiving notice of divorce.

Connecticut

No

Conn. Gen. Stat. § 45a-257(c) (wills)

Connecticut law does not automatically revoke life insurance beneficiary designations upon divorce. Requires policyholder to notify the insurance company. Wills have automatic revocation.

Delaware

No

12 DE Code § 209 (wills)

Delaware law does not automatically revoke life insurance beneficiary designations upon divorce based on the snippets. Automatic revocation applies to wills.

District of Columbia

No

D.C. Code § 18-109 (wills)

D.C. law does not automatically revoke life insurance beneficiary designations upon divorce. Requires clear and convincing evidence in the divorce decree to remove a former spouse. Implied revocation for wills.

Florida

Yes

Florida Statutes Section 732.703

Automatic revocation of ex-spouse as beneficiary on life insurance policies, IRAs, and POD accounts upon divorce. Exceptions exist, such as reaffirmation after divorce or court orders. Federal policies may be exempt.

Georgia

No

O.C.G.A. § 53-4-49 (wills)

Georgia law does NOT automatically revoke life insurance beneficiary designations upon divorce. Requires active change by the policyholder. Automatic revocation for provisions benefiting an ex-spouse in a will.

Hawaii

Yes

HI Rev Stat § 560:2-804

Revocation of probate and nonprobate transfers, including life insurance, by divorce or termination of reciprocal beneficiary relationship. Exceptions for express terms in governing instruments, court orders, or contracts.

Idaho

Yes

Idaho Code § 15-2-804

Revocation of probate and nonprobate transfers, including life insurance, by divorce. Exceptions for express terms in governing instruments, court orders, or marital settlement agreements. Intestacy laws protect against ex-spouse inheriting without a will.

Illinois

Yes

750 ILCS 5/503 (b-5)(2)

Illinois is an automatic revocation state for life insurance, removing ex-spouse as beneficiary unless the divorce judgment states otherwise, the insured redesignates the ex-spouse, or the ex-spouse is designated for the benefit of a child. ERISA plans are an exception.

Indiana

Yes

Indiana Code § 32-17-14-23

Beneficiary designation in favor of a former spouse is revoked upon divorce. Exceptions for irrevocable designations, designations made after divorce, or explicit statements in the designation. Revived by remarriage.

Iowa

Yes

Iowa Code § 598.20A (life insurance) and § 598.20B (other contracts)

Beneficiary designations for life insurance and other contracts (IRA, annuity, etc.) in favor of a former spouse or their relatives are nullified upon divorce. Exceptions for redesignation or remarriage. Wills also have automatic revocation.

Kansas

Yes

K.S.A. 59-105

Revocation of spousal inheritance rights upon divorce for governing instruments, including life insurance. Exceptions for express terms, court orders, or contracts. Protection for payors without notice. ERISA plans are an exception.

Kentucky

No

KRS 403.060(2) (restoration of property) and 394.092 (wills)

Kentucky law does not automatically revoke life insurance beneficiary designations upon divorce. Restoration of property statute has been applied to life insurance. Automatic revocation for wills.

Louisiana

Yes

R.S. 9:2449.1 (deferred compensation) and R.S. 22:911.1 (life insurance and annuity)

Automatic revocation of benefits payable to a former spouse in life insurance policies, annuities, pension, profit-sharing, retirement, or similar plans upon divorce after beneficiary designation. Exceptions if agreement expressly provides otherwise. Prospective application only (after August 1, 2024) and does not apply to Louisiana Public Retirement Law.

Maine

Yes

18-C M.R.S.A. § 2-804

Automatic revocation of beneficiary designations in retirement assets and life insurance policies as if the ex-spouse disclaimed the asset immediately before divorce. Exceptions if the divorce judgment states otherwise. Notice to insurer required.

Maryland

No

Md. ESTATES AND TRUSTS Code Ann. § 4-105 (wills)

Maryland law does not automatically revoke life insurance beneficiary designations upon divorce. Automatic revocation for wills and trusts. Custodian policies may require redesignation.

Massachusetts

Yes

G. L. c. 190B, § 2-804

Divorce revokes revocable dispositions to a former spouse in governing instruments, including life insurance policies. Exceptions in divorce judgment or separation agreement. Retroactive application.

Michigan

Yes

MCL 552.101 (divorce judgment determines rights) and MCL 700.2807 (revocation upon divorce)

Michigan law provides for automatic revocation of an ex-spouse's beneficiary status on life insurance policies and wills upon divorce finalization. Divorce judgment should determine rights. Reversible by court order in the divorce decree or re-execution after divorce. ERISA plans are an exception.

Minnesota

Yes

Minn. Stat. § 524.2-804

Automatic revocation of spouse as beneficiary upon divorce for life insurance policies and other governing instruments. Exceptions for express terms in governing instrument, court order, or marital property division contract. Supreme Court upheld constitutionality in Sveen v. Melin. ERISA plans are an exception.

Mississippi

Yes

Miss. Code § 91-29-23 (life insurance) and § 91-29-7 (nontestamentary transfers)

Automatic revocation of pre-decree beneficiary designation of ex-spouse in life insurance policies, retirement benefits, and other financial plans upon divorce or annulment. Exceptions for divorce decree naming ex-spouse, redesignation after decree, or designation in trust for a child.

Missouri

Yes

RSMo 461.051

Automatic revocation of beneficiary designation in favor of a former spouse or their relative upon divorce or annulment. Exceptions for irrevocable designations, designations after divorce, or explicit statements. Revived by remarriage. ERISA preemption noted.

Montana

Yes

MCA § 72-2-814

Revocation of probate and nonprobate transfers, including life insurance, by divorce. Exceptions for express terms in governing instrument, court order, or marital estate division contract. Protection for payors without notice.

Nebraska

Yes

Nebraska Statute § 30-2333

Revocation of revocable dispositions to a former spouse in governing instruments, including life insurance, upon divorce. Exceptions for express terms, court orders, or marital estate division contracts. Severance of joint tenancies. Protection for payors without notice.

Nevada

Yes

NRS 111.781

Automatic revocation of all listed beneficiaries on life insurance policies upon finalization of divorce. Treats policy as if the insured died intestate if not updated. Also revokes wills, trusts, and powers of attorney. Redesignation after divorce allowed.

New Hampshire

No

RSA 551:13 (wills and trusts)

New Hampshire law does NOT automatically revoke life insurance beneficiary designations upon divorce. Requires manual change. Automatic revocation for wills and revocable trusts.

New Jersey

Yes

N.J.S.A. 3B:3-14

Automatic revocation of probate and non-probate transfers, including life insurance, by divorce. Exceptions for express terms in governing instrument, court order, or marital estate division contract. Revival upon remarriage.

New Mexico

Yes

NMSA 1978 § 45-2-804

Revocation of probate and nonprobate transfers, including life insurance, by divorce. Exceptions for express terms in governing instrument, court order, or marital estate division contract. Revival upon remarriage. Marriage/divorce does not automatically revoke unless a new form is submitted.

New York

Yes

EPTL § 5-1.4

Divorce revokes revocable dispositions to a former spouse in governing instruments, including life insurance policies. Exceptions for express terms in governing instrument, court order, or contract. Treated as if former spouse predeceased. Revival upon remarriage. Judicial separation has the same effect.

North Carolina

No

N.C.G.S. § 31-5.4 (wills)

North Carolina law does NOT automatically revoke life insurance beneficiary designations upon divorce. Requires specific action to change. Automatic revocation for provisions benefiting an ex-spouse in a will.

North Dakota

Yes

N.D. Cent. Code § 30.1-10-04

Revocation of probate and nonprobate transfers, including life insurance, by divorce. Exceptions for express terms in governing instrument, court order, or marital estate division contract. Protection for payors without notice.

Ohio

Yes

Ohio Revised Code § 5815.33

Termination of marriage revokes designation of spouse as beneficiary for life insurance, annuities, POD accounts, IRAs, employer death benefit plans, unless designation or divorce decree provides otherwise. Automatic revocation for Public Employees Retirement System. Protection for payors without notice.

Oklahoma

Yes

15 OK Stat § 178

Divorce or annulment treats former spouse as predeceased for beneficiary designations in various contracts, including life insurance. Numerous exceptions, including remarriage, contrary intention in decree or contract, redesignation after divorce, and joint tenancy property.

Oregon

No (but judgment may revoke)

ORS 107.121 (judgment may revoke)

Oregon law allows a judgment of dissolution to revoke a revocable beneficiary designation in favor of a spouse or their relative but does not do it automatically. The court may require maintenance of life insurance for support. ERISA and federal benefits may be exempt from automatic revocation.

Pennsylvania

Yes

20 Pa. C.S. § 6111.2

Divorce or pending divorce (with established grounds) renders revocable beneficiary designations in favor of a spouse or former spouse ineffective, unless specific exceptions apply. Divorce decrees must include a provision informing parties to reaffirm or change beneficiary status.

Rhode Island

Yes (proposed)

Proposed S2291

A proposed bill in 2020 aimed to automatically revoke beneficiary status of a spouse upon divorce or annulment. Current law provides automatic revocation for wills. Unclear if the proposed bill passed. Further research needed.

South Carolina

Yes

SC Code § 62-2-507

Divorce, annulment, or court order terminating marital property rights revokes revocable dispositions to a former spouse in governing instruments, including life insurance. Exceptions for express terms in governing instrument, court order, or marital settlement contract.

South Dakota

Yes

SDCL § 29A-2-804

Revocation of probate and nonprobate transfers, including life insurance, by divorce. Exceptions for express terms in governing instrument, court order, or marital estate division contract. Revival upon remarriage.

Tennessee

No

Tenn. Code § 394.092 (wills)

Tennessee law does NOT automatically revoke life insurance beneficiary designations upon divorce. Automatic revocation only applies to provisions for ex-spouses in wills. Divorce decree can mandate beneficiary designation. Courts may enforce agreements to relinquish beneficiary status.

Texas

Yes

Texas Family Code § 9.301 and Texas Estates Code § 123.052

Automatic revocation of ex-spouse as beneficiary of life insurance upon divorce unless the decree designates the ex-spouse, the insured redesignates, or the ex-spouse is designated as trustee for a child. Similar rules for wills and revocable trusts. Federal plans have different rules.

Utah

Yes

Utah Code § 75-2-804

Divorce revokes former spouse as beneficiary from life insurance policy unless express terms in policy, court order, or marital estate contract indicate otherwise. Rebuttable presumption of revocation. Divorce decree should acknowledge review of beneficiaries. Automatic revocation for public retirement system.

Vermont

No

14 V.S.A. § 11 (wills)

Vermont law does NOT automatically revoke life insurance beneficiary designations upon divorce. Requires manual change. No automatic revocation by divorce for wills either.

Virginia

Yes

Va. Code § 20-111.1

Revocable beneficiary designation in life insurance contract owned by one spouse naming the other is revoked upon entry of divorce decree on or after July 1, 1993. Death benefit paid as if former spouse predeceased. Exceptions for contrary provision in divorce decree or written agreement, or for trusts. Notice required in divorce decrees.

Washington

Yes

RCW 11.07.010

Dissolution of marriage or domestic partnership revokes provision for payment or transfer of nonprobate asset (including life insurance) to former spouse/partner as if they died at the time of decree entry. Exceptions if decree requires maintenance for former spouse/partner or children. Federal law (ERISA) preempts state law for employer-provided policies.

West Virginia

Yes

W. Va. Code § 48-5-614

Upon entry of final divorce order, any revocable beneficiary designation in a written contract (including life insurance) owned by one party providing death benefit to the other is revoked. Treated as if former spouse predeceased. Exceptions if divorce order or written agreement provides otherwise, or for trusts. Automatic revocation for wills.

Wisconsin

Yes

WI Stat § 854.15

Divorce revokes revocable dispositions to former spouse or their relative in governing instruments, including life insurance. Exceptions for express terms in instrument, court order, or marital property agreement, or if divorce is nullified or parties remarry. Intent contrary to statute can override.

Wyoming

Yes

W.S. 2‑6‑125

Revocation of probate and nonprobate transfers to a spouse upon divorce or annulment. Exceptions for express terms in governing instrument, law, court order, or marital estate division contract. Severance of joint tenancies. Revival upon remarriage unless prohibited by agreement. Protection for payors without notice. Automatic revocation for wills.

Conclusion: Peace of Mind Through Planning

Navigating the complexities of life insurance beneficiary revocation upon divorce requires careful attention to both state and federal laws. Understanding whether your state has an automatic revocation statute and recognizing the distinct rules governing ERISA plans are crucial steps in ensuring your wishes are fulfilled. Proactive planning, including a thorough review of your policies and legal documents, and seeking expert legal advice are essential to achieving peace of mind and protecting the financial security of your loved ones during and after the significant life transition of divorce. Dorian Law P.C. stands ready to provide guidance and support in these important insurance matters, offering nationwide expertise to help you navigate these often-challenging circumstances.