You got life insurance when you and your spouse were married. Naturally, your spouse was the one who you named as the beneficiary. If you passed away, he or she would get paid.
Then you got divorced. You updated your will to reflect your new situation, making sure your assets went to your kids, but you know that your life insurance plan is outside of your will. It still pays out to the listed beneficiary.
Make sure you update that document, as well. Many people simply change it so that their kids will get paid instead of their ex.
One reason to do this is that the money may really be for the kids, no matter who you leave it to; they’re the reason you took out the policy. By leaving it directly to them, you ensure that your family is still supported.
For example, your ex may want you to leave him or her as the beneficiary. You’re paying child support while your kids live with your ex. You’re paying alimony. Your ex is worried that, if you die and he or she doesn’t get the insurance payout, it will be impossible to raise the kids alone.
By leaving the payment to the kids, or putting it in a trust for them, you take care of this problem. Your ex doesn’t have to worry, and you don’t have to leave the money directly to someone to whom you’re no longer married. Everyone wins.
As you can see, it’s important to update more than your will after a divorce. Be sure you understand all of the legal steps that need to be taken at this point in your life.
Source: State Farm, “Insurance Changes You Might Need to Make After Divorce,” accessed Sep. 15, 2017