Divorce and Life Insurance

Posted: 5 July, 2023

Life Insurance Beneficiary & Divorce Decree

It used to be if you failed to update the beneficiary designation on your life insurance policies after a divorce, the individuals originally listed as your beneficiaries would automatically receive the proceeds of your policy upon your death. This meant a former spouse would still be entitled to receive the funds, even if your desire was to leave your estate to your current spouse or other party such as your children. 

The Impact of NRS 111.781

Recent legislation enacted in Nevada, known as NRS 111.781, has changed how life insurance proceeds may be distributed after divorce. Under NRS 111.781, all listed beneficiaries on your life insurance policies are automatically revoked once your divorce is finalized. In addition, the statute mandates the revocation of all of the following:

  • Wills and trusts
  • Powers of attorney
  • Any document that permits an ex-spouse to serve in a fiduciary capacity on your behalf

Effects of NRS 111.781 on Joint Property

In some cases, a former spouse could remain as a listed owner of a home, even though he or she no longer has an interest in the property. The statute automatically revokes the interest of joint tenants with right of survivorship, meaning your ex-spouse has no legal claim on your property upon your death. Instead, the interest reverts to equal tenancy in common, allowing your property to go to heirs, such as your children.

Does This Mean You Should Not Update Your Insurance Policies After Divorce?

Although NRS 111.781 virtually eliminates the need to update your insurance policies and notify other interested third parties of your divorce, this doesn’t mean you should neglect to do so. The possibility still exists that an unexpected event could complicate matters upon your death. Also keep in mind that third parties bear no responsibility for how your property or assets are distributed if they were never notified of your divorce. Properly updating all legal documents after divorce is still the best course of action.