Estate planning encompasses many different forms, from trusts and wills to powers of attorney and life insurance. These forms are affected by changes throughout your life, requiring you to update them to keep them current. One such event is a divorce and its impact upon your life insurance policy.
Revocation upon divorce
When two people marry, it’s common for a spouse to take out a life insurance policy, naming the other spouse as the beneficiary of that policy. If they wind up divorcing, the life insurance policy may not be at the top of the priority list – it’s easy to forget that your ex-spouse is still the named beneficiary, even if you no longer want them as a beneficiary.
Fortunately, Nevada anticipates this problem and has a law to address it. Nevada Statute Section 111.781 provides that, upon divorce, the designation of an ex-spouse as beneficiary of a life insurance policy is automatically revoked. If you do not update the policy and suddenly pass away, the policy will be treated as though you had died intestate.
There may be exceptions to the revocation
Even if a policy was purchased and executed in Nevada, it could be controlled by other laws. If the policy is a federal policy, for instance, it would be controlled by federal law rather than Nevada law – and revocation may not occur.
Nevada’s revocation law also only applies to policies in which the named beneficiary can be revoked. Some policies are designed to be irrevocable and a divorce may have no effect upon them.
Regardless of the nature of your life insurance policy, you should have it reviewed and updated in cooperation with an attorney who is experienced in Nevada estate planning. Doing so will ensure that your estate plan continues to evolve to meet your ever-changing needs.