Many spouses are told the same thing after a death.
“You are not the named beneficiary, so you are not entitled to anything.”
That statement is often wrong.
In community property states, life insurance proceeds do not always belong exclusively to the named beneficiary. Spousal property rights can override beneficiary designations in ways insurers rarely explain.
Why beneficiary designations are not always controlling
Life insurance companies prefer clean outcomes. One beneficiary. One check. No disputes.
Community property law complicates that simplicity.
In many states, income earned during marriage is community property. Premiums paid with that income may give the surviving spouse a legal interest in the policy, even if someone else is named as beneficiary.
That interest does not disappear just because the beneficiary designation says otherwise.
When community property rights arise
Community property claims often arise in situations like these:
A spouse names a child from a prior marriage as beneficiary
A spouse names a parent or sibling
A spouse changes the beneficiary without spousal consent
Premiums were paid entirely during marriage
The policy existed before marriage but premiums continued afterward
In these cases, the surviving spouse may be entitled to a share of the proceeds.
Insurers often oversimplify the law
Insurers frequently treat beneficiary designations as absolute.
They may say:
The policy controls
The beneficiary designation overrides all other claims
The spouse waived rights by not being named
Community property law often says otherwise.
Courts routinely analyze where the premium money came from, not just who was named on the policy.
The difference between ownership and proceeds
A key issue in these disputes is the difference between policy ownership and policy proceeds.
Even if the insured owned the policy individually, the proceeds can still be partially community property if marital funds were used to maintain the policy.
That distinction surprises many beneficiaries.
Divorce, separation, and remarriage make this worse
Community property claims are especially common after remarriage.
A policy purchased during a prior marriage
Premiums paid during a later marriage
A beneficiary named long ago
No updates made
After death, the current spouse and the named beneficiary may both have legitimate claims.
Insurers often respond by filing interpleader and letting the court decide.
Waivers are not automatic
Some insurers argue that a spouse waived community property rights.
That waiver must usually be explicit.
Silence is not a waiver.
Not being named is not a waiver.
Failing to object earlier is not a waiver.
Courts often require clear evidence that the spouse knowingly gave up rights.
Why ERISA changes the analysis
Employer provided group life insurance is often governed by ERISA.
ERISA can preempt state community property laws in certain situations, especially where plan documents require strict adherence to beneficiary designations.
This is where many spouses lose claims they would otherwise win.
That distinction matters. It is why these cases must be analyzed carefully before accepting an insurer’s position.
Red flags that a community property claim exists
A spouse should look closer when:
Premiums were paid during marriage
The beneficiary is not the spouse
No written waiver exists
The policy was maintained with marital income
The insurer refuses to explain how it analyzed community property law
These cases are fact driven and often misunderstood.
How these disputes are resolved
Community property disputes are rarely resolved by denial letters.
They are resolved through:
Negotiation
Interpleader litigation
Tracing premium payments
Examining marital timelines
Applying state specific property rules
Insurers often expect spouses to walk away. Many do not need to.