Pat and Chris get divorced. As part of their divorce decree, Chris’ life insurance policy will continue to benefit Pat. Chris then remarries and changes the beneficiary to Kim, his second spouse. Chris dies. Both Pat and Kim claim they are the beneficiaries. Depending on the divorce decree, Pat or Kim could be the recipient of the policy benefits. If the divorce decree was a QDRO (Qualified Domestic Relations Order), Pat would win. If the divorce decree was not officially ordered but merely agreed to and signed by the couple, then Kim would win.
A Domestic Relations Order is an order officially issued by a State authority, usually a court, approving a marital property settlement for the spouse according to State law. To be “qualified,” the order must pertain to a specific type of dependent of the party, and must clearly specify particular information and be issued as part of an official divorce decree under specific circumstances.
For more specifics on QDROs and how, under ERISA (Employee Retirement Income Security Act), a beneficiary is determined in the above circumstances, you can find the same excellent article I read by Joan O. Vorster and Courtney Cruz called “Life Insurance Benefits After Divorce” from ABA Solo, Small Firm and General Practice Division. I include the link below:
If you divorced and your ex’s life insurance policy was part of your property settlement, you’ll want to ensure the conclusion of a court claim against your ex’s life insurance policy in your favor. Consult with your attorney to make sure your property settlement agreement is a QDRO (Qualified Domestic Relations Order) and allows you to win such a claim in the future.This blog is written by Bridget-Michaele Reischl, Attorney DECORO LAW OFFICE, PLLC www.decorolaw.com