Insurance and divorce

Beneficiary designations for life insurance or retirement plans are an often overlooked aspect of estate planning.  A change in life circumstances may suggest a need to change those beneficiaries.  Beneficiary designations can be the source of estate litigation, as a recent case demonstrates.

Ronald and Heidi Lee had been married for ten years when Heidi sought a divorce.  In the divorce proceedings, Heidi asked for and received $2,000 monthly maintenance and a lump sum of $35,384.  To secure the payments, Ronald agreed to leave Heidi as the beneficiary of his $150,000 life insurance policy.

He didn’t do that. Ronald changed the beneficiary to his daughter, Abriel.  When he died two years after the divorce was finalized, Ronald was current on his maintenance payments but still owed some $32,000 on the lump sum.

Both Heidi and Abriel claimed the insurance proceeds, and the inevitable lawsuit began.  The insurance company deposited the proceeds with the court and was released from the case.  Abriel offered to pay Heidi the $32,000 still owed to her, but Heidi believed that the terms of the divorce decree meant that she should get all of the $150,000 insurance proceeds, because she should have been the sole beneficiary on the policy.

Examining the terms of the decree carefully, the trial court concluded that Abriel had the better argument. The insurance policy was meant to guarantee the payments to Heidi, not to provide a bonus in the event of Ronald’s premature death.  The Washington appellate court now agreed with this judgment.

The point being, we at The Trust Company of Kansas want to help ensure that disputes over beneficiary designations are avoided in any circumstance, divorce or otherwise, and that your wishes for your estate are carried out upon your death.


As our longtime partners will tell you, we help our clients accomplish their goals, not our own. And we stay focused on the financial aspects of their lives so that they can stay focused on their priorities.

Our goal is to build a legacy by helping you protect yours. And we ensure that you meet your goals by closely monitoring your assets, so that you may continue enjoying a lifestyle to which you’ve become accustomed.

The officers at The Trust Company of Kansas are always willing to discuss your goals for your estate and help you to create a plan that is well-aligned with your wishes.  If you have a specific question about beneficiary designation, please contact us at (800) 530-5254 or visit, and one of our Certified Trust and Financial Advisors will be happy to assist you.