Question, life insurance and beneficary

[Newlydivmomto4]

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

My friends and I were having a discussion and we couldn't figure this out.

Dad gets divorced from mom, court order says that child must be sole beneficiary of life insurance policy.

Now we know that a child cannot inherit if they are under 18 and the inheritance would be placed in a trust etc.

However, what if dad gets remarried? When I have done life insurance with work it always says that the beneficiary must be the spouse, if not then the spouse has to sign off on the policy. How would this affect the above court order?

 

[Dandy Don]

The former spouse who is divorced may want to figure out if there is a way that she could check with the insurance company each year to verify whether the beneficiary designation (that names the child) is still in force, or maybe she should just assume that it is still in force and has not been changed to someone else's name.

Maybe dad, if he chose to and could afford to do so, could purchase a different life insurance policy if he wants to provide coverage for his new spouse.

The beneficiary designation does not always have to be a spouse--it could be whoever he decides he wants to be beneficiary.

What state is applicable here? Different states have different requirements about insurance policies in a divorce.

 

[Zigner]

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

My friends and I were having a discussion and we couldn't figure this out.

Dad gets divorced from mom, court order says that child must be sole beneficiary of life insurance policy.

Now we know that a child cannot inherit if they are under 18 and the inheritance would be placed in a trust etc.

However, what if dad gets remarried? When I have done life insurance with work it always says that the beneficiary must be the spouse, if not then the spouse has to sign off on the policy. How would this affect the above court order?

The state truly does matter, and this also may be a company-specific thing. I didn't have to have my spouse "sign off" on my policy when I named other beneficiaries. In any case, this seems like a no-brainer...spouse should willingly sign off on the policy.

 

[FlyingRon]

Pay out from a life insurance is not "inheritance." But you are right, just making a minor a beneficiary isn't likely to be a good idea. The minor can't do anything with the funds until a court appoints a trustee in that case.

There are ways around this. Yes, you can indeed set up a trust, or use the UTMA custodian process. The insurer should be able to provide some answers to you there. Again, it depends on the state.

 

[cbg]

In a community property state, a spouse *may* have a right under the law to a portion of the life insurance if the beneficiary is designated as someone else. Whether or not a spouse has to sign a waiver is both state and insurer specific. It is not law.

401(k) or other retirement plans - THOSE the spouse has to waive rights to in writing, by Federal law.