Most of us have a life insurance policy. When you bought the policy you were most likely asked to fill out paperwork to name beneficiaries of the policy. This probably happened years ago.
Well, a lot of things have probably changed through the years. You may have gotten married. Had children. Had more children. Maybe even gotten divorced since you named the beneficiaries of your life insurance policies. You need to review your beneficiary designations and here’s why:
If you have divorced and have failed to remove your ex-spouse as the beneficiary your children/current spouse may have difficulty obtaining the policy proceeds upon your death. In Michigan, the law says the ex-spouse is not entitled to retirement and life insurance proceeds unless it is specifically called for in the divorce judgment. However, life insurance companies are only required to make payment to the designated beneficiary unless they are made aware of the prior divorce before issuing payment. Therefore, if your current spouse or children fail to notify the life insurance company of the divorce and the payment goes to your ex-spouse, your intended beneficiaries are going to have to chase after that person to get the money. That isn’t something you’re going to want your survivors to have to do.
So take the time to review your beneficiary designations. If you have questions or would like to talk about your estate plan, please drop me a note at [email protected] or visit my website at http://www.averylawplc.com.