Life Insurance Claim Attorney – Divorce

Here’s is another situation that a Life Insurance Claim Attorney will learn quickly.  It deals with life insurance beneficiaries and divorces.

This is a 1987 opinion from the 14th Court of Appeals.  It is styled, Novotny v. Wittner.  It stands for the proposition that a pre-divorce designation of a former spouse is invalidated upon divorce unless the spouse is re-designated after the divorce.  This opinion is now codified in Texas Family Code, Section 9.301.

This is an appeal from the award of insurance proceeds to the successor guardian of the decedent’s children.  The dispute over the ownership of the proceeds of the life insurance policy is between the decedent’s former wife, who was the named beneficiary on the policy, the administrator of the decedent’s estate, and the successor guardian of the decedent’s two children.  The decedent and Appellant were divorced twenty-one days before the decedent’s death.  Although the divorce decree awarded all insurance on decedent’s life to him as his sole and separate property, and divested Appellant of all interest in the policies, he had not yet changed the beneficiary designation on one policy.  The trial court found that the divorce decree terminated Appellant’s beneficial interest in the policy and awarded the proceeds to the decedent’s children.  The Court agreed.

At the time of his death the decedent had not changed Appellant’s designation as beneficiary on his life insurance policy.  Appellant requested payment of the policy proceeds from the carrier.

Appellant maintains that the trial court erred in awarding the insurance proceeds to the decedent’s heirs and not to her.  She contends the language of the divorce decree was not specific enough to terminate Appellant’s beneficial interest in the insurance policy.

A divorced spouse is eligible as a beneficiary of a life insurance policy on the life of the ex-spouse.  Termination of the ownership interest in a policy does not necessarily destroy the right to receive the policy proceeds as the designated beneficiary.  — (This use to be the law)  However, the beneficial interest may also be terminated by the divorce decree where it clearly appears from the decree that it was intended not only to segregate the property of the spouses, but also to deprive either spouse of the right to take as beneficiary under an insurance policy on the life of the other.

The divorce decree contained the following pertinent language:

Respondent [Joseph Patrick Novotny] is vested with the right, title, and interest in and to the following as Respondent’s sole and separate property, and Petitioner [Appellant] is hereby divested of all right, title, and interest in and to such property:

. . . . .

3. Any and all insurance, pensions, retirement benefits, and other benefits arising out of Respondent’s employment.

. . . . .

6. Any and all policies of life insurance insuring Respondent’s life.

The trial court specifically found that the language of the decree showed the clear and unambiguous intent of both the parties to terminate both the ownership and beneficial rights of Appellant in and to this life insurance policy.  The court also found that the decedent’s death, just twenty-one days after the divorce, made it impossible for him to have had an opportunity to “finalize matters related to the divorce including the changing of the beneficiary” on this insurance policy.


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