Virginia Divorce: Changing your life insurance beneficiary after divorce – when enough isn’t enough

“Isn’t it ironic, don’t you think?” – Morissette, Alanis. “Ironic.” Jagged Little Pill. Maverick/Reprise. 1995.

The most common person to name as the primary beneficiary on your life insurance policy is your spouse. This is something that folks often do without putting much thought into it, and when they first take out a policy. As a result it is no wonder that when people get divorced years or sometimes decades later, they often forget to go back and change that beneficiary designation so that their ex doesn’t get paid when they die. Worry not! The Virginia General Assembly took care of that for us, when it enacted Va. Code Ann. § 20-111.1, which states in part that when you get divorced, any revocable designation of your spouse as the beneficiary of your death benefit goes away. That way even if it slipped your mind to remove your ex from the policy, in most cases the mere act of getting divorced will take care of that for you.

Seems like a useful statute that helps to carry out people’s wishes even if they forget about it. Unfortunately it has recently served to do the exact opposite. In Metropolitan Life Insurance Co. v. Gorman-Hubka, et al., the U.S. District Court for the Eastern District of Virginia, applying Virginia law, determined that a deceased man’s sisters were entitled to the proceeds of his life insurance policy in spite of his exceedingly clear desire to keep his ex-wife as the beneficiary. So how did a statute intended to help and protect the presumed interests of a deceased person end up doing the exact opposite? The Court bent over backwards and came up with an incredibly strained interpretation of normal human conversation to support its conclusion.

Mr. Hubka had a life insurance policy that named his then wife, Ms. Gorman-Hubka, as beneficiary. Eventually they got divorced, and Mr. Hubka wanted to keep her on the policy. Now, the policy does require any beneficiary change to be in writing, but since Mr. Hubka was a normal human being, and not a lawyer or judge, he didn’t go through the fine print to figure out what to do – he called his insurance carrier and asked them. He explained that he was recently divorced and wanted to keep his ex-wife as the beneficiary. He asked “[s]o I don’t need to do any paperwork or anything like that to keep her the same?” and he was told “[r]ight. If she is already the beneficiary, then there is nothing you need to do.” Simple enough.

About a month after that, Mr. Hubka passed away, and eventually the issue ended up in court. The Court was well aware of the conversation he had with the agent, and well aware of his intentions, but it decided that his sisters would get the money instead of his ex. It did that in two steps – first it determined that code section 20-111.1 revoked his ex-wife’s designation as beneficiary. That part is fine. Where it went off the rails is the next part. Although there is a doctrine in the law that allows a designation to be changed without it being in writing, the Court said that Mr. Hubka didn’t do enough to qualify for that. This is because the guy on the phone told him that there is nothing he needed to do “if she is already the beneficiary.” So since section 20-111.1 had revoked that designation, she wasn’t “already the beneficiary.” That’s right. Instead of interpreting conversation the way any regular person would – the way Mr. Hubka did – the Court came up with this hair-splitting interpretation to reach a result that everyone knew was the opposite of what this man wanted with his death benefit.

Why was the Court so intent on going against a deceased person’s obvious wishes? We can’t begin to guess. What we, and you, can learn from this is to not take anything this serious for granted. Make sure you have a clear and correct understanding of who is entitled to your life insurance benefits, both before and after you get divorced.

If you want to discuss the details of your specific case with one of the experienced family law attorneys at Solan Alzamora, PLLC, please feel free to contact us at 703-359-0088 or info@SAlawfirm.com.

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