Note that answers given in this section cannot take the place of independent legal or financial advise. Please read our disclaimer.

"I am thinking about getting a divorce. Should I make any changes to the insurance policies I have which says that my spouse is my beneficiary? And, when should I make that change?"

The owner of a life insurance policy can change the beneficiary at any time. However, the divorce process may lead to different outcomes for your policies. For example, whole life policies with cash value may be considered martial assets subject to division. Additionally, if you have minor or college age children, the court or your settlement may require you to maintain a life insurance policy to guarantee their financial security. Therefore, it may be wise to not make any changes to the policy until the final divorce settlement is stipulated.

While your reaction upon filing for divorce may be to change the beneficiary on a policy, you may want to consider the original purpose of the policy. Perhaps the policy was taken out to protect the financial future of your children, who will be under the care of your ex-spouse. If that is the case, you may realize that keeping your spouse listed as the beneficiary is still accomplishing the ultimate goal of the policy. Establishing your priorities and your plan to achieve them may require you to step back and assess the situation. A consultation with a certified divorce financial professional can often help you establish a plan for your financial assets during and post divorce.

Brandi Ruffalo is a financial divorce advisor with Valuation & Forensic Partners, LLC in Chicago and Schaumburg in Illinois. She specializes in basic lifestyle and financial analyses to the valuation of private businesses or stock option. She can be reached at bruffalo@thebdc.com, (312) 212-4370.

Tuesday, May 15
at 8 pm to 8:30 EST
Out With the Tragedy: Turning Divorce into a meaningful experience
with Allison Pescosolido and Andra Brosh, founders of Divorce Detox
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