Legal Issues: Effect of Divorce on Wills and Life Insurance Policies

The following is provided for informational purposes only and is not, nor should it be construed as legal advice.

No one likes to think that his or her marriage might end in divorce or other dissolution, but it is the sad truth that many of them do, and that such dissolution has an effect on estate plans. Questions that this firm is often asked are, “What happens to a bequest or devise in my Will if I am later divorced?” “Is my ex-spouse still the beneficiary of my life insurance policy if I fail to change my beneficiary even though we are divorced?”

The relationship in time between the marriage dissolution and the naming of the spouse as a beneficiary in a Will or the relationship in time between the dissolution and the designation of a spouse or ex-spouse as beneficiary of a life insurance policy dictates whether or not the designation stands or is made ineffective by statute. (Estates Code §123.001 et seq.)

If a gift in a Will was made before the marriage was dissolved, the court decree dissolving the marriage acts to keep the gift from being effective. Simply stated:

  • If the Will was executed after the date of the dissolution of marriage, devises or bequests made in the Will shall be upheld. In my own practice, I occasionally have a client come into my office who continues to want his/her ex-spouse to inherit property. If that is the case, great care should be taken to acknowledge the fact that the spouses are no longer married, but that the testator wishes for his/her ex-spouse to still remain a beneficiary.
  • If the Will is executed before the date of the dissolution of marriage, devises or bequests made in the Will shall be treated as if the testator did not intend to name his\her ex-spouse as a beneficiary.
  • In addition to the ex-spouse being excluded, each relative of the ex-spouse who is not also related to Testator and who is named as a beneficiary or a fiduciary under the Will is excluded.
  • On rare occasions, this rule may be amended by the divorce decree itself, but it is too complex to discuss in this short presentation.

The gifts made to the ex-spouse in the Will shall not pass to the ex-spouse, but instead will become a part of the decedent’s estate and shall pass in accordance with the other provisions of the Will or intestate succession. These other provisions may be either to name alternate beneficiaries or instructions on how to divide the residuary estate. (“Residuary estate” for purposes of this discussion shall be defined as what is left over, if any, after all of the identified distributions have been made.)

If the question involves the named beneficiary of a life insurance policy, a similar rule is found in Texas Family Code §9.301; the designation of the ex-spouse as beneficiary is not effective unless one or more of the following have occurred:

  • If the divorce decree designates the insured’s former spouse as the beneficiary, then he/she remains the beneficiary pursuant to a court order.
  • If the insured re-designates the former spouse as a beneficiary after the date of the rendition of the decree, the former spouse may be made the beneficiary of life insurance policies. Great care should be taken, however, to spell out the fact that the re-designation was done with awareness and knowledge that the person named is an ex-spouse. The order of the dates becomes very important.
  • The former spouse is designated to receive the proceeds in trust for the benefit of a child or a dependent of either former spouse. A common way that this circumstance may occur is where the person that the policy owner wishes to benefit is not yet of legal age or is otherwise incapacitated. In this circumstance, the life insurance proceeds might be made payable to the ex-spouse in trust for the benefit of the child(ren) or incapacitated person.

If the designation of beneficiary does not meet one of the criteria above, then the former spouse shall not take under the life insurance policy, but instead the policy will be payable to the alternate beneficiary, if any. If there is no named alternate beneficiary, life insurance proceeds will be paid into the estate of the decedent and distributed in accordance with his/her Will or the laws of intestate succession, whichever applies.

I am also occasionally asked what the impact of the marriage dissolution has on retirement benefits or other financial plans. The answer to this question is not quite as straightforward as it is with Wills or life insurance policies, but does follow most of the same guidelines. It is common for family courts to enter orders that set forth the rights and duties of each spouse. If that is the case, the court’s decree rules.

We would wish you the great, good fortune of never having a marriage dissolved, but if that wish cannot be granted, then we wish you the good fortune of finding an attorney of your choice who knows to plan for contingent possibilities.

James Bright has been admitted to practice before the Federal Courts for the Southern District of Texas and Eastern District of Texas as well as all of the Justice Courts, Probate Courts, County Courts at Law, District Courts, Courts of Appeal and Supreme Court for the State of Texas. He maintains an office in Houston and by appointment another at 208 McCown Street in the heart of historic Montgomery. Contact may be made by telephone (936) 449-4455 or (281) 586-8277. For more information about wills or probate in Texas, please see-



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