Divorce can bring unexpected challenges, especially with finances. Insurance policies often raise questions during divorce. Automatic Temporary Restraining Orders (ATROs) help protect assets, but they can confuse everyone with a stake in the insurance benefits.
Can you change your insurance beneficiary during the divorce proceedings?
ATROs are standard orders that start automatically when you file for divorce in California. These orders stop both parties from making big changes to their financial situation, including:
- Transferring, encumbering, or disposing of property
- Changing insurance beneficiaries
- Modifying insurance coverage
California Family Code says ATROs prevent spouses from changing insurance policies without the other party’s written consent or a court order. You need permission to remove your spouse as a beneficiary on your life insurance policy during the divorce process.
What happens if your spouse dies during the divorce?
If your spouse dies in the middle of the divorce and you are still the named beneficiary on their insurance policy, you might still get the benefits. California Probate law says that divorce or annulment cancels certain beneficiary designations, but this rule only applies after the divorce is final. However, note that insurance companies might have their own rules about payouts during divorce. Some might hold the money in escrow until the court decides who should get it.
What guidance should you seek to make the process easier?
It may be difficult during the divorce when you must consider insurance policies. ATROs keep things the same for now, but do not freeze your finances forever. As your divorce moves forward, you and your spouse will decide how to divide assets, including insurance policies.
An attorney can help you understand your rights and duties regarding insurance policies during divorce. They can advise you on protecting your interests while following ATROs and other legal rules. With the right guidance, you can make smart choices about your insurance policies and ensure a fair outcome in your divorce.
