The trainwreck of a divorce...

[Allen Trent]

I’m a little confused . My friend had a $2 mil 30 yr level term policy . For reasons his wife was owner and beneficiary. When they divorced he tried to cancel policy but company refused as she was the owner . No court can stop her from receiving the proceeds or cancel the policy unless it’s in the divorce decree .I’m many divorces the courts can force someone to keep the policy with the ex as beneficiary correct ?

Depends on state. But Maybe your friends divorce decree allowed for her to continue to own that policy. Good divorce lawyers have that worked out like any other assets. But many people going through divorce are broke & take the default divorce decree language

 

[WinoBlues]

Yes, and marriage is not necessarily ... necessary to have insurable interest.

Heck, I'd bet 50% of my FE client's beneficiaries is a domestic partner, not a spouse in the legal sense.

Easily 50% or more of my FE / SIWL's owners, payors and benes are adult children, parents, grandchildren, grandparents. Then throw in Aunts and godmother.

 

[Tahoe Ray]

I’m a little confused . My friend had a $2 mil 30 yr level term policy . For reasons his wife was owner and beneficiary. When they divorced he tried to cancel policy but company refused as she was the owner . No court can stop her from receiving the proceeds or cancel the policy unless it’s in the divorce decree .I’m many divorces the courts can force someone to keep the policy with the ex as beneficiary correct ?

Correct.

But we didn't get the ownership structure here.

 

[walthamny]

State laws are more important than what the beneficiary form says for life insurance says except when it comes to anything covered under ERISA. With ERISA whatever the Federal law says applies. Here is the supreme court reasoning on this, which I disagree. Life insurance lobby lost this case at supreme court.
[EXTERNAL LINK] - Opinion analysis: Court rejects constitutional challenge to state law on insurance policies after divorce - SCOTUSblog

 

[DHK]

I'm looking forward to meeting with my law professor probably later this week... and perhaps one day doing a webinar or podcast with him and exploring this area in planning and what agents and advisors can do to help their clients... and protect themselves if clients won't move forward.

He's mentioned this to me many times that divorce is the #1 cause of wealth erosion. Of course, only Jeff Bezos can get a divorce and remain one of the wealthiest men in the world. Most business owners and probably policyowners... just don't know... just as I don't fully know.

 

[The Benefit Coach]

He's mentioned this to me many times that divorce is the #1 cause of wealth erosion.

And he is absolutely correct.