Setting up a life insurance policy helps provide for your family in the event of your death. However, you and your spouse may have decided to call it quits on your marriage. If divorce is in your future, you probably do not want your spouse to benefit from your life insurance any longer.
While you may have the ability to remove your spouse as a beneficiary on your life insurance policy, you could experience legal consequences by doing so.
Jurisdiction over your policy
The Motley Fool explains that your life insurance could become part of your marital estate. Given that a divorce settlement divides up marital property between the spouses, you may incur a legal sanction if you deprive your spouse of an asset that a judge believes your spouse should have.
It is possible your divorce judge will issue a decree that stops you or your spouse from changing your beneficiary designations. If the life insurance policy provides for your children, the judge may freeze the beneficiary designation after your divorce to make sure your offspring receive support.
Negotiation may be an option
Divorces can be hard-fought affairs. Still, if you and your spouse are on amicable terms, you might negotiate to trade off different assets so that your spouse will feel comfortable giving up a claim to your life insurance policy.
From there, you might change your life insurance policy so that your children are beneficiaries. If your children are minors, you could name a caretaker to receive the insurance payout and hold it for your loved ones until they come of age. Negotiating with your spouse, perhaps through an uncontested divorce, may help you make feel confident that the right people benefit from you.
