Your ex may receive the proceeds of your insurance policies if still named as the beneficiary

When you obtain a life insurance policy, generally you name your current spouse or significant other as beneficiary.  If you separate or divorce, the last thing on your mind is that you should change the beneficiary designation you made years prior.  This leads to many people leaving the originally named beneficiary on their policy, whether it be life insurance (See Davis v. Travelers Insurance, 196 N.W.2d 526 (Iowa 1972)) or a retirement account (Lynch v. Bogenrief, 237 N.W.2d 793 (Iowa 1976)).  Down the road, you may re-marry and upon your death when the proceeds of these policies should be paid out, there may very well be a fight between the current and prior significant other.  And since you are deceased, you have no say in the matter.  The courts then must make a decision about who receives the proceeds, and the outcome will vary across the country.

In some states, they allow the current significant other to take the proceeds based on the theory that the deceased could not have meant for his or her ex to receive proceeds from their policy.  Michigan is one of such states.  In Iowa however, this is not the case.  Iowa law has held for years that the named beneficiary takes the proceeds, regardless of current circumstances or events that occurred between the naming of the beneficiary and the death that led to the proceeds being paid out.  The Iowa Supreme Court has made it clear that this is not necessarily the best outcome, but that the current law does not allow any other outcome.  The Justices state that it is up to the legislature to change the law so that the outcome in these situations is more in line with what the deceased person would have wanted to happen.  If you have such a policy and have been divorced, make sure that you have changed the named beneficiary and in some cases, have included a provision in your divorce decree that specifies your wishes.

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