When couples in Pennsylvania make the decision to divorce, there can be serious, immediate financial concerns that follow. However, the financial impacts of divorce are not only those that occur immediately after the end of a marriage. It can be particularly important to handle important matters relating to retirement funds, life insurance policies and other accounts with beneficiaries.
When a couple divorces, they often have a number of contracts that name each other as beneficiaries. These can include life insurance policies and other long-term investments. The act of divorce itself does not change the contract between a person and their insurer or bank; instead, the account owner must make sure to file a change of beneficiary. The life insurance company will generally pay out the benefits to whoever is listed in their files. When one does not make the necessary changes after their divorce, it can leave their children or other loved ones without the money that they need to cover final expenses.
People often attempt to handle this issue in the divorce decree, in which one party renounces rights to the other's life insurance or other policies. In these cases, it can be possible for the beneficiary named as the new, proper beneficiary in the divorce decree to bring suit against the former partner. However, the litigation involved can be messy, complex and costly. By updating beneficiary designations after a divorce, one can avoid the danger of this kind of legal battle.
Divorce may come with an array of financial tasks that can be important for the future, especially when significant assets are involved. A family law attorney can work with a divorcing spouse to advocate strongly for a fair settlement.