Guides
Divorce and your ex as beneficiary: revocation-on-divorce laws
Whether divorce removes your ex as life insurance beneficiary depends on state law, the type of policy and your decree. Compares Texas, Florida and the UPC.
In many states, a divorce automatically cancels your ex-spouse's status as beneficiary on an individual life insurance policy, and the money passes as if the ex had died first. But the rule is not universal, the details differ by state, and it generally does not apply to employer plans governed by ERISA or to federal programs such as SGLI. The only reliable fix is to file a new beneficiary form with the insurer or plan.
What a revocation-on-divorce statute does
A revocation-on-divorce statute says that once a marriage ends, a designation naming the former spouse in a will, trust or "nonprobate" contract such as life insurance is treated as if the former spouse had died before the insured. The money then goes to the contingent beneficiary, and if there is none, to whatever the policy or state law says next; see what happens if no beneficiary is named.
The Uniform Probate Code, a model law several states have adopted in some form, includes this rule in section 2-804. As Minnesota's version shows, divorce or annulment revokes designations to the former spouse, the revocation can be undone if the divorce is later nullified or the couple remarries, and a payor is protected if it pays before getting written notice of the divorce. Minnesota's law is the one the Supreme Court reviewed in Sveen v. Melin.
State rules are not identical
The wording and exceptions differ. Two examples:
| Question | Texas (Family Code §9.301) | Florida (Statutes §732.703) |
|---|---|---|
| Triggered by | A decree of divorce or annulment after the spouse was named | Divorce or invalid marriage before death |
| Who is removed | The former spouse | The former spouse; the asset passes as if the ex predeceased |
| When the ex still collects | If the decree names the ex, the insured re-designates the ex after the decree, or the ex is named to hold proceeds in trust for a child or dependent of either former spouse | If the ex remarries the insured, a court order requires keeping the designation, or the designation is irrevocable under applicable law |
| Where the money goes | To the named alternative beneficiary, or if none, the insured's estate | As if the ex predeceased |
| Insurer protection | Insurer is liable only if it got written notice at its home office from an interested person before payment and had not interpleaded the funds | No liability for paying per the designation without knowledge of the divorce |
The Texas details come from Texas Family Code §9.301 and the Florida details from Florida Statutes §732.703. See Texas and Florida for each state's other policy rules. Differences you may meet in other states:
- Whether the law covers only divorce or also legal separation (most apply only to a completed divorce or annulment).
- Whether the ex-spouse's relatives, such as in-laws named as beneficiaries, are also removed.
- Whether the statute covers life insurance at all, or only wills.
- Whether a decree's silence about the policy is enough, or the decree must say something.
- Whether the former spouse who is paid anyway can be sued for the money by whoever would have received it.
Because these points are written in state law and not in your policy, ask a family or estate attorney how your state handles them.
The Supreme Court cases
Sveen v. Melin (2018). Mark Sveen named his wife Kaye Melin as beneficiary and his children as contingent beneficiaries in 1998. They divorced in 2007 and he never changed the form. Minnesota had passed its revocation-on-divorce law after he bought the policy. The Court held, 8 to 1 in an opinion by Justice Kagan, that applying the law to the older designation did not violate the Constitution's Contract Clause. One reason: the law is a default rule that the insured can reverse by filing a change form. See Cornell's case page.
Egelhoff v. Egelhoff (2001). The Court held that ERISA preempts a Washington revocation-on-divorce statute as applied to an ERISA-governed life insurance and pension plan, so the plan had to pay the ex-wife named in its records.
Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009). A divorce decree that waived the ex-wife's pension rights did not change who the plan administrator had to pay, because the administrator must follow the plan documents, and the participant never removed her designation through the plan's procedures. See Employer life insurance, ERISA and beneficiary disputes.
Hillman v. Maretta (2013). A Virginia law let someone who would have received the money sue a former spouse who collected from a federal employee's group life insurance. The Court held the Federal Employees' Group Life Insurance Act preempted that part of the statute, so the former spouse the employee had named kept the proceeds. Similarly, in Ridgway v. Ridgway (1981), the Court held that federal law on servicemembers' insurance prevailed over a state-court divorce decree's constructive trust.
When the ex still collects
An ex-spouse can still end up with the money in these situations:
- The policy is part of an ERISA plan. Workplace life insurance is generally governed by federal law that follows the plan's records.
- A federal program. SGLI, VGLI and FEGLI follow the designation on file. See Servicemembers' Group Life Insurance and Federal Employees' Group Life Insurance (FEGLI): Basic, A, B and C.
- Your state has no applicable statute, or the statute excludes your policy.
- A decree or agreement requires it. Courts commonly order coverage for children or support. See life insurance and divorce.
- You named the ex after the divorce, or the designation was irrevocable. See irrevocable beneficiaries.
- The insurer paid in good faith without notice of the divorce. Statutes in several states protect the insurer, though the ex-spouse may still face a claim from the person who should have received the money, subject to the Hillman limits above.
Hypothetical example
Say Elena names her husband Tom as beneficiary of a $250,000 individual policy and her sister as contingent beneficiary. They divorce in a state with a revocation statute like the UPC version, and Elena never updates the form. If Elena dies, the insurer, once told of the divorce, treats Tom as having died first and pays her sister. If Elena had instead had the same $250,000 through her employer's ERISA plan, the plan would pay Tom, because the plan records still name him. Both situations are illustrations.
What to do now
- Pull every beneficiary designation, including workplace coverage and retirement accounts with death benefits.
- File new forms with each insurer or plan and keep the written confirmation. See how to change your life insurance beneficiary.
- If a decree requires coverage, follow it and name the required beneficiary, probably in a trust for children.
- Name a contingent beneficiary so a revoked designation doesn't leave a gap.
- If you are the ex-spouse and believe you were wrongly removed or kept, the insurer may file an interpleader; see life insurance beneficiary disputes and interpleader. Talk to an attorney; see when to hire a life insurance lawyer.
Key takeaways
- Many states automatically revoke an ex-spouse's life insurance designation on divorce, but rules, exceptions and insurer protections differ by state.
- Sveen v. Melin (2018) upheld applying such a law to a designation made before the law passed.
- For ERISA plans, Egelhoff (2001) and Kennedy (2009) mean the plan's records control; federal insurance programs likewise follow the form on file.
- A good-faith insurer that did not know of the divorce can be protected if it pays the ex.
- Do not rely on a statute: file a new designation after every divorce.