Many people believe that divorce automatically cleans up their life insurance. They assume that once paperwork is signed and lives move on, old beneficiary issues disappear. Unfortunately, that is often not true.
Even when an ex spouse is no longer listed on the policy, there are situations where they can still claim some or all of the life insurance proceeds. These disputes catch families off guard because they usually surface after death, when it is too late to fix anything informally. When you are facing a beneficiary dispute, we are here for you. Look at our beneficiary dispute fact sheet for more information.
How Ex Spouse Claims Happen Even After Divorce
Life insurance is governed by contract and, in some cases, federal law. Divorce does not automatically rewrite those contracts. As a result, ex spouse claims arise in ways people do not expect.
Some of the most common scenarios include:
Divorce Orders That Required Coverage
Many divorce judgments require one spouse to maintain life insurance for the benefit of the other, often to secure child support or spousal support. If that order exists, the insured may not have been allowed to change beneficiaries at all.
In these cases, even a later beneficiary change may be ineffective. Courts often enforce the divorce order over the policyholder’s later wishes.
Policies Held by Trusts
Life insurance owned by a trust adds another layer of complexity. If an irrevocable trust names an ex spouse as a beneficiary and the trust was never amended, divorce alone does not remove them.
Because the insured does not control an irrevocable trust, updating the policy personally may not change who gets paid.
Beneficiary Updates That Never Actually Happened
It is common for people to believe they changed their beneficiary when they did not. Forms were filled out but never submitted. Online changes were started but not completed. Employer records were not updated.
When death occurs, the insurer pays based on what is on file, not what the insured intended.
Agreements Between Former Spouses
Sometimes people intentionally leave an ex spouse as beneficiary to provide for children or fulfill a private agreement. If there is evidence of that intent, courts may honor it even if state law would otherwise revoke the designation.
Intent matters, but it has to be supported by documents or credible proof.
Revocation Upon Divorce Laws and Their Limits
Many states have laws that automatically revoke an ex spouse’s beneficiary status when a divorce becomes final. These laws are meant to prevent outdated designations from controlling years later.
However, these statutes do not apply in every situation.
An ex spouse may still have a valid claim if:
• the insured re named them after the divorce
• the divorce decree required continued coverage
• the policy is governed by federal law
• the insured clearly intended the ex spouse to remain beneficiary
Federal policies like ERISA governed employer plans, SGLI, and FEGLI often override state revocation laws entirely. In those cases, insurers must pay whoever is listed, even if that person is an ex spouse.
Why These Disputes Turn Into Legal Fights
Insurance companies do not decide who deserves the money. They follow the paperwork. When there is any uncertainty, they often freeze payment or file an interpleader action and let a court decide.
That process can take months or longer and forces family members into litigation at an already difficult time.
The outcome usually depends on documents, not relationships.
Why Legal Advice Matters Before and After Divorce
Life insurance issues are often overlooked during divorce. Family law attorneys focus on property division and custody. Insurance details sometimes get buried or handled loosely.
A life insurance attorney can help by:
• reviewing divorce judgments for insurance obligations
• confirming whether beneficiary changes were effective
• explaining how state and federal law apply
• challenging or defending ex spouse claims
• preventing avoidable interpleader disputes
Even when a divorce is amicable, insurance mistakes can create serious problems later.