Life Insurance Beneficiaries After Divorce

Have you ever wondered what happens if you forget to update your life insurance beneficiaries after a divorce? This was precisely the scenario in the case of Mark A. Sveen and Kaye L. Melin. The couple married in 1997, with Sveen taking out a life insurance policy that same year. He designated Melin as the primary beneficiary and his children as contingent beneficiaries in 1998.

Fast forward to 2007, Sveen and Melin divorced. Sveen passed away in 2011, but he never got around to changing the beneficiary designations on his life insurance policy. So, does this mean his ex-spouse, Melin, inherits the life insurance proceeds?

Not necessarily. In 2002, Minnesota amended its probate code, including the introduction of a revocation-upon-divorce statute under Minn. Stat. Sec. 542.2-804. According to this law, life insurance beneficiary designations are automatically revoked in the event of a divorce or annulment, unless a court order or divorce contract states otherwise.

The Minnesota Supreme Court examined this case and concluded that applying the statute to revoke Melin's primary beneficiary designation did not infringe upon any pre-existing contractual agreements. Thus, the application of the revocation-upon-divorce statute was upheld, preventing Melin from receiving the life insurance proceeds.