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  1. #1
    inked123 is offline Junior Member
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    Pennsylvania, life insurance beneficiary

    What is the name of your state (only U.S. law)? Pennsylvania

    While in process of divorce, spouse was diagnosed with terminal illness. They are now threatening to change beneficiary on life insurance. We have not proceeded with divorce, and I will need proceeds to raise the kids. How can I stop this from happening? If I file for divorce now, I know it can be dragged out if not finalized. Does filing freeze all such changes from taking place?
  2. #2
    seniorjudge is offline Senior Member
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    Q: While in process of divorce, spouse was diagnosed with terminal illness. They are now threatening to change beneficiary on life insurance. We have not proceeded with divorce, and I will need proceeds to raise the kids. How can I stop this from happening? If I file for divorce now, I know it can be dragged out if not finalized. Does filing freeze all such changes from taking place?

    A: Who is "they"?
    There are two rules for success:

    (1) Never tell everything you know.
  3. #3
    inked123 is offline Junior Member
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    My spouse.
  4. #4
    Zigner is offline Senior Member
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    Quote Originally Posted by inked123 View Post
    What is the name of your state (only U.S. law)? Pennsylvania

    While in process of divorce, spouse was diagnosed with terminal illness. They are now threatening to change beneficiary on life insurance. We have not proceeded with divorce, and I will need proceeds to raise the kids. How can I stop this from happening? If I file for divorce now, I know it can be dragged out if not finalized. Does filing freeze all such changes from taking place?
    "They" means more than one person...

    Who is "they"?
  5. #5
    seniorjudge is offline Senior Member
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    Quote Originally Posted by inked123 View Post
    My spouse.
    Your spouse is trying to change the beneficiary on her life insurance policy?

    Who OWNS the policy?
    There are two rules for success:

    (1) Never tell everything you know.
  6. #6
    inked123 is offline Junior Member
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    Should have said "she"
  7. #7
    seniorjudge is offline Senior Member
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    Quote Originally Posted by seniorjudge View Post
    Your spouse is trying to change the beneficiary on her life insurance policy?

    Who OWNS the policy?
    Answer these two questions.
    There are two rules for success:

    (1) Never tell everything you know.
  8. #8
    inked123 is offline Junior Member
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    Quote Originally Posted by seniorjudge View Post
    Your spouse is trying to change the beneficiary on her life insurance policy?

    Who OWNS the policy?
    There are two, one with an outside company and one at work. I would say she owns them. We both have our own listing the other as beneficiary. It was always that way.
  9. #9
    seniorjudge is offline Senior Member
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    Quote Originally Posted by inked123 View Post
    There are two, one with an outside company and one at work. I would say she owns them. We both have our own listing the other as beneficiary. It was always that way.
    She has the right to change the beneficiary any time she wants.

    Divorce makes no difference.
    There are two rules for success:

    (1) Never tell everything you know.
  10. #10
    LdiJ is offline Senior Member
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    Quote Originally Posted by seniorjudge View Post
    She has the right to change the beneficiary any time she wants.

    Divorce makes no difference.
    That may not be true. In my state you can't change the beneficiary of a life insurance policy away from a spouse, without the spouse signing off on the change. If that's true in my state, it may be true in other states as well.

    However, OP could also suggest that his spouse change the beneficiary to a trust for the children, perhaps with the trust instrument alloting a certain monthly income for the support of the children. That would cover his concerns regarding caring for the children, without allowing a lump sum into his hands to spend how he sees fit.

    Quite frankly, if I was talking divorce, or in the process of divorce, I would want my life insurance to go into trust for my child.
  11. #11
    mistoffolees is offline Senior Member
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    Quote Originally Posted by LdiJ View Post
    That may not be true. In my state you can't change the beneficiary of a life insurance policy away from a spouse, without the spouse signing off on the change. If that's true in my state, it may be true in other states as well.

    However, OP could also suggest that his spouse change the beneficiary to a trust for the children, perhaps with the trust instrument alloting a certain monthly income for the support of the children. That would cover his concerns regarding caring for the children, without allowing a lump sum into his hands to spend how he sees fit.

    Quite frankly, if I was talking divorce, or in the process of divorce, I would want my life insurance to go into trust for my child.
    That is true in my state, as well. Once the divorce is filed, there are default temporary orders in place covering things like dissipation of assets and life insurance. You can't cancel any insurance or change beneficiaries until the divorce is final and there's a court order. OP needs to find out what the default orders are in his state.

    The issue will need to be resolved by agreement between the parties (or by the judge if they can't agree).

    Depending on the size of the policies, the judge may allow some of them to be canceled or left to the estate, but it is very common for each party to be required to have enough life insurance to cover that parent's share of the kids' upkeep until they turn 18. That is, if OP is going to end up paying $300 per month in CS and there are 5 years left until the child turns 18, the judge would often order $18 K in insurance with the stbx as the beneficiary. Usually, this calculated number is quite small, so it's better to agree on a more reasonable figure. In my case, I have life insurance with my daughter's trust as beneficiary worth about 5 times what the court says I need, but I also have a much smaller policy with my ex as beneficiary (per the court order).
  12. #12
    tuffbrk is offline Senior Member
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    In NJ as well - regardless of whether you are married or in process for a divorce, the owner of the life insurance policy can not change the beneficiary from the spouse unless said spouse signs a waiver and acknowledgement.
  13. #13
    penelope10 is offline Senior Member
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    Quote Originally Posted by LdiJ View Post
    That may not be true. In my state you can't change the beneficiary of a life insurance policy away from a spouse, without the spouse signing off on the change. If that's true in my state, it may be true in other states as well.

    However, OP could also suggest that his spouse change the beneficiary to a trust for the children, perhaps with the trust instrument alloting a certain monthly income for the support of the children. That would cover his concerns regarding caring for the children, without allowing a lump sum into his hands to spend how he sees fit.

    Quite frankly, if I was talking divorce, or in the process of divorce, I would want my life insurance to go into trust for my child.
    Same in my case here in TX. The beneficiary could not be changed without the signature of the spouse.(He was beneficiary on my policy, I on his) Sounds like OP and spouse are not divorced yet....OP could call the life insurance company or the agent who sold the policy. The agent, or insurance company, may not answer questions specific to the policy if she is not the "owner",but they probably will answer general questions. (In regards to changing a beneficiary on a policy). And it may end up being frugal to let the agent/insurance company know that there is/are an individual/individuals that would like to have the beneficiary changed. (Prior to the divorce being finalized).
  14. #14
    MFinancier is offline Member
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    Not sure about PA but in IL. life insurance purchased while you were married is considered marital property and preliminary injunctions arising from divorce petitions invoke general wording to bar either party from "transferring or encumbering marital property". In some states specific wording is included to cover insurance...but in IL. case law has shown that the injunctions general intent of maintaining the financial status quo pending a final decree includes prohibiting the changing of beneficiaries of marital property until dispostion at MSA. So even if the beneficiary was changed...you'd still have a claim on the proceeds if he died before final decree.
    Last edited by MFinancier; 08-20-2008 at 11:52 AM.
  15. #15
    penelope10 is offline Senior Member
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    Quote Originally Posted by MFinancier View Post
    Not sure about PA but in IL. life insurance purchased while you were married is considered marital property and preliminary injunctions arising from divorce petitions invoke general wording to bar either party from "transferring or encumbering marital property". In some states specific wording is included to cover insurance...but in IL. case law has shown that the injunctions general intent of maintaining the financial status quo pending a final decree includes prohibiting the changing of beneficiaries of marital property until dispostion at MSA. So even if the beneficiary was changed...you'd still have a claim on the proceeds if he died before final decree.
    You could very well be correct. On a personal level, speaking to the agent/insurance company may give her additional peace of mind. (They could also answer questions in regards to possible scenarios as to changing the beneficiary after the divorce becomes finalized, etc.)

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