Many couples begin their estate planning with a whole life insurance policy. Like a whole life policy, many policies retain value and are used as an investment vehicle. Since many investment’s like this guarantee a return on investment each year many many young families will start here.
Another reason why dividing the insurance at the end of a marriage is very important.
Sec. 7.004. DISPOSITION OF RIGHTS IN INSURANCE. In a decree of divorce or annulment, the court shall specifically divide or award the rights of each spouse in an insurance policy. Added by Acts 1997, 75th Leg., ch. 7, Sec. 1, eff. April 17, 1997.
Sec. 7.005. INSURANCE COVERAGE NOT SPECIFICALLY AWARDED. (a) If in a decree for dissolution the court does not specifically award all of the rights of the spouses in an insurance policy other than life insurance in effect at the time the decree is rendered, the policy remains in effect until the policy expires according to the policy’s own terms. (b) The proceeds of a valid claim under the policy are payable as follows: (1) if the interest in the property insured was awarded solely to one former spouse by the decree, to that former spouse; (2) if an interest in the property insured was awarded to each former spouse, to those former spouses in proportion to the interests awarded; or (3) if the insurance coverage is directly related to the person of one of the former spouses, to that former spouse. (c) The failure of either former spouse to change the endorsement on the policy to reflect the distribution of proceeds established by this section does not relieve the insurer of liability to pay the proceeds or any other obligation on the policy. (d) This section does not affect the right of a former spouse to assert an ownership interest in an undivided life insurance policy, as provided by Subchapter D, Chapter 9. Added by Acts 1997, 75th Leg., ch. 7, Sec. 1, eff. April 17, 1997.
As an experienced San Antonio Divorce Lawyer, I understand how difficult it can be to end your marriage, not to mention going through property division. From my office at 1807 San Pedro I offer free consultations 7 days a week.