If you have recently divorced, you cannot forget to revise the beneficiaries on your insurance policies. Separation agreements are often perceived as the “be-all, and end-all” of divorce. However, the case Hartford Life and Accident Insurance v. Herring and Crandall, underscores the importance of also changing the beneficiaries on your insurance policies.
In Hartford, the case revolved around a formerly married couple, Alan Herring and Elizabeth Crandall. In 2018, Herring designated his-then wife as the beneficiary to a life insurance policy valued at more than $300,000. In 2020, Herring and Crandall separated. Their separation agreement read:
“Life Insurance. Husband acknowledges that his is the owner of life insurance policies … Husband shall retain ownership of these policies, free and clear of any claim by wife, and shall be solely responsible for the premium payment that may be due thereon.”
In 2021, Herring died in the Commonwealth of Virginia. Herring’s brother, as the executor of his estate, claimed the proceeds of the life insurance policy. However, Herring’s ex-wife remained the beneficiary listed on the policy.
Despite the language of the separation agreement, the U.S. District Court for the Western District of Virginia ruled that Herring’s ex-wife was the proper beneficiary. The court reasoned “while the separation agreement states Alan Herring would retain ownership of th[is] policy, it does not clearly indicate that the beneficiary of the policy was to change.” The court also noted that before his death, Herring had the opportunity to change the beneficiary on the policy, but he failed to do so. Furthermore, ownership of the policy gave Herring the ability to make changes and the duty to make premium payments, but ownership did not give Herring entitlement to the policy’s benefits.
Unless a separation agreement “clearly appear[s]” to alter the beneficiary status of an insurance policy, courts will generally adhere to the listed beneficiary. This means changing the beneficiaries on your policies is a crucial step in the divorce process, and it cannot be forgotten.
Led by Joanna Foard and Erin Masin, General Counsel, P.C.’s family/divorce can help you. Divorce and related matters can be complex and because of their importance, it is beneficial to consult with an attorney experienced in family law matters. Our family law attorneys are well-versed in divorce matters and can help you navigate the process and protect your rights. Email us at firstname.lastname@example.org, call us at 703-556-0411, or use this Contact Us form to see how we can help you.