Divorce and your will, life insurance

In Ohio, a divorce, dissolution, annulment or separation agreement will result in the revocation of parts of your will that leave property to your ex, confer a power of appointment to your ex, or name your ex as an executor or trustee, just in case my too-huge, can’t-change “Revoked” image didn’t convey this.  (This might not be true in all states, which would require you to execute a codicil to your current will, or execute a new will, to remove your ex from the will.)

Life insurance, as well as retirement plans and other assets that require beneficiary designations, typically operate outside of probate.  Who you list in your will is not as important as the beneficiary you designate on the policy’s form.  While most states, including Ohio, have revocation statutes that essentially revoke the ex spouse as beneficiary (ex is treated as having predeceased the owner), there are exceptions.

Exceptions have included post-divorce statements desiring the ex wife to remain as beneficiary on the ex-husband’s life insurance policies (an Ohio appeals court found that his intent was clear enough to show that he did not want his ex wife removed as beneficiary; had he not made these statements, his policies would have been paid to his estate and then distributed to his sons under Ohio’s revocation statute), and where federal contract law contradicts a state law’s revocation statute (United States Supreme Court held that a federal employee’s ex wife, listed as beneficiary and unchanged after divorce, was entitled to his federal life insurance benefits instead of current wife, despite state revocation statute–federal law controlled).

The take-away here is to update your estate plan and change beneficiary designations once you begin the process of divorce or dissolution.  Should you die during the divorce or dissolution process, your pending divorce or dissolution will be dismissed, meaning your documents will not fall under any revocation statute, and the terms of these documents will control how assets are distributed.  The goal with an estate plan and beneficiary designations is to leave your assets to people you choose.  With the majority of my clients, the typical scenario is “all to spouse, then to children equally.”  If you are ending your marriage, it would be a reasonable assumption that your soon-to-be ex spouse is not a beneficiary you would choose.

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