People getting divorced are often locked in a hostile battle: The emphasis is on whom gets what in terms of property, income and assets, and of course who gets custody of the children if there are any. But what happens if, during divorce proceedings, one of the spouses becomes critically ill or dies – with no changes to life insurance during the divorce?
This was illustrated recently in a high profile celebrity divorce case where the life policy owner – film star Dennis Hopper, was locked in an acrimonious divorce with his estranged fifth wife Victoria Duffy-Hopper. Hopper attempted to change the beneficiary of his life policy mid divorce so that his wife and young daughter would not receive an insurance payout in the event of his death. However the judge decided he would have to wait until the divorce came to trial before any names could be changed. Hopper died before the divorce came through and his estranged partner received the life insurance payout.
Rules Prevent Life Policy Holders from Impulsiveness
The rules regarding when changes can be made to an estate plan vary from state to state. In California, for instance, no changes can be made for a set period of time after a divorce is filed. What this seems to imply is that a person holding a life insurance policy might be better off making any necessary changes before filing the divorce papers.
The reasons for preventing those going through a divorce from making big changes such as changing beneficiaries of wills or life insurance policies is to allow them a ‘cooling off’ period; it has happened that soon to be divorced couples reunite and, if a spouse then dies without having changed their will or life policy back, they leave their bereaved partner with nothing.
Source
The Probate Lawyer Blog[1], June 2010; also featured in Forbes Magazine [2]
photo credit: ljv