You need to review your life insurance policy if you have been divorced, so you confirm who the beneficiaries are.

If a decree of divorce or annulment is rendered after you have designated your spouse as a beneficiary under a life insurance policy, a provision in the policy in favor of your former spouse is likely not effective unless (1) the divorce decree designates your former spouse as the beneficiary; (2) you redesignate your former spouse as the beneficiary after rendition of the decree; or (3) your former spouse is designated to receive the proceeds in trust for, on behalf of, or for the benefit of a child or a dependent of either former spouse.  If a designation is not effective based on the above, the proceeds of the policy are payable to the named alternative beneficiary or, if there is not a named alternative beneficiary, to the estate of the insured.  This can cause significant tax implications as life insurance money typically does not go through the estate.

Life events happen to us all the time – when was the last time you looked at who you have designated as your beneficiary (life insurance, 401k, IRA, bank accounts, wills, etc.).  If there has been a birth, death, change in family status or other major change you may not realize what effect the beneficiary designations you made months and years ago will have.

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