Life Insurance Policies and Guaranteed Maintenance, Part 2

 Posted on February 06, 2015 in Family Law

Sometimes a life insurance policy may be the most valuable asset in an Illinois divorce.

A life insurance policy may be used to guarantee maintenance paid to a spouse as the result of a divorce. If a husband dies, his surviving, former spouse will receive his life insurance proceeds as payment for his maintenance obligation.

However, one might ask:

After my Illinois divorce, what can I do if my ex-husband changes the beneficiary of the life insurance from me to his second wife or girlfriend? My maintenance ends upon his death and there would be no life insurance proceeds to pay to me.

If your ex-husband is still alive, you can file a petition to change the beneficiary of his life insurance policy back to you. However, what happens if your husband dies and he secretly changed the beneficiary of his life insurance to a second wife or girlfriend?

Life Insurance Policies Governed by ERISA

First, prior to divorce, you should have determined whether or not the life insurance that your soon-to-be ex-husband has to guarantee your maintenance is through a group policy governed by ERISA. Your divorce lawyer can contact your spouse’s employer, either by subpoena or directly, to determine if the group insurance policy falls under the federal statute, ERISA.

If your ex-husband's life insurance policy is a group policy governed by ERISA, you must have a Qualified Domestic Relations Order or QDRO entered to guarantee that he cannot change the beneficiary to anyone other than you.

If you fail to have a QDRO entered, your ex can change his beneficiary at any time. If he is passes away, there is nothing you can do about it. Your only remedy is to file a case against his probate estate; however, if he has no assets, your claim may be worthless.

Therefore, it is very important for your divorce lawyer to do his due diligence and determine whether a QDRO is necessary to protect the change of beneficiary. A QDRO should be entered at the same time as your Judgment for Dissolution of Marriage. However, if your ex-husband is still alive, you may be able to do so even afterwards.

Life Insurance Policies not Governed by ERISA

Second, if your ex-husband's life insurance policy is not covered by ERISA, and he secretly changes his policy to make his second wife or girlfriend the beneficiary, and then he dies, all is not lost. You have a right to file a lawsuit to impose a constructive trust upon the proceeds of the life insurance to be paid to his second wife or girlfriend. You must, however, act promptly—otherwise the money may be spent before you have a chance proceed with your case.

Consult a Knowledgeable Illinois Divorce Lawyer

If you are concerned about your financial future and whether or not you will be guaranteed maintenance post divorce, please contact a knowledgeable DuPage County divorce lawyer today. At the Law Office of Martoccio & Martoccio, our attorneys can walk you through the divorce process and discuss your options. Call 630-920-8855.

<< Read Part 1 of the Series, Read Part 3 of the Series >>