09 Jun Who gets the proceeds of my ex’s life insurance policy?

Q. My ex-husband recently passed away and had a life insurance policy that was established during our divorce to secure child support and college for our two children with the three of us as beneficiaries. The policy was to be a minimum of $150,000. When he got sick, he said he never changed the policy even though the kids are grown. The insurance company said I was revoked from the policy because we were divorced, and the children are not beneficiaries, either. Would the proceeds go to his estate, which will be split between the two children?
— Unsure

A. Thanks for your question.

There’s a lot to unpack, so let’s get started.

Unless a document expressly provides otherwise, a judgment of divorce revokes the designation naming a former spouse as beneficiary of a life insurance policy or as a beneficiary under the will, among other designations, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

She said life insurance is frequently used as a substitute for spousal and child support payments upon the payor’s death. However, in your case, it appears the support payments and/or the obligation to make those payments ended long before his death.

“Whether you or your children would have a right to the life insurance proceeds as beneficiaries based on the terms of the marital settlement agreement or even a contract right to claim the life insurance benefits based on the terms of the marital settlement agreement will depend on the exact language in the agreement and how the insurance company — or the courts should you challenge a denial — interpret the agreement,” she said.

Assuming the insurance company refuses to pay the proceeds based on the marital settlement agreement and a contingent beneficiary is not named, the policy proceeds will likely be paid to the estate, she said. Then, it can be distributed to your children as the named beneficiaries of the insured’s estate, Romania said.

“Unfortunately, by being paid into the estate, the life insurance may be subject to creditor claims whereas when paid directly to a named beneficiary it is free of such claims,” she said. “If subject to such claims, the issue will be whether your children’s claim can be considered as a judgment giving it some priority against other creditors, although costs of administration, taxes, and medical bills will have priority.”

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This story was originally published in June 2025.

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