Does Iowa have a law

Posted: Mon Aug 06, 2012 01:46 pm Post Subject:

There are several sections of the Iowa Code that may be applicable to your question. In general, Chapter 633 is known as the "Iowa Probate Code" (633.1)

Section 633.5 ("NONESTATE PROPERTY -- INSURANCE PROCEEDS.") states that "A decedent's estate shall not include life insurance proceeds, unless the proceeds are payable to the decedent's estate."

According to my reading of the Iowa Code, Section 633.271 ("EFFECT OF DIVORCE OR DISSOLUTION.") applies ONLY to the provisions in a will made prior to the divorce. In such an instance, any bequest to the divorced spouse in the will is automatically stricken at the time of the divorce. "1. If after making a will the testator is divorced or the testator's marriage is dissolved, all provisions in the will in favor of the testator's spouse or of a relative of the testator's spouse, including but not limited to dispositions, appointments of property, and nominations to serve in any fiduciary or representative capacity, are revoked by the divorce or dissolution of marriage, unless the will provides otherwise." All of the references in this subsection to 633.271 describe "the will". 633.5 specifically keeps life insurance named to someone/something other than the estate out of the estate, and is thus, according to my reading, not subject to 633.271.

Similarly, Section 633.357 describes the beneficiary of a "Custodial Independent Retirement Account" as not having their interest in those proceeds being usurped by the will, or when the decedent is intestate, by the Probate Code.

Other sections of the Iowa Code make it clear that the will does not supercede the instructions given to an insurance company with regard to a named beneficiary, with the exception of a beneficiary who "intentionally or unjustifiably" causes the death of the insured:

633.535 "3. A named beneficiary of a bond, life insurance policy, or any other contractual arrangement who intentionally and unjustifiably causes or procures the death of the principal obligee or person upon whose life the policy is issued or whose death generates the benefits under any other contractual arrangement is not entitled to any benefit under the bond, policy, or other contractual arrangement, and the benefits become payable as though the person causing death had predeceased the decedent."

So, based on my reading of the probate laws of Iowa, it does not appear that divorce revokes the rights of an ex-spouse named as a life insurance policy's beneficiary. I could certainly be incorrect in my understanding -- I have not looked for Iowa case law in this regard. A publication by the State of Iowa, I believe, lends credence to my interpretation. http://publications.iowa.gov/354/1/divorce.pdf This document discusses the same aspect of an ex-spouse being removed from the will, and makes no mention of removal from a life insurance policy. In the section on Life Insurance, it does not mention an ex-spouse being removed as beneficiary, that section only discusses the need to obtain life insurance to provide for child support or alimony following a divorce.

Other states' probate laws, such as California's, affirmatively list life insurance as one of the non-probate instruments from which the entitlement of a divorced spouse is revoked automatically at the moment of the divorce. A reading of California's Probate Code, for example, makes it clear that the legislature considers the ex-spouse in the same light as a predeceased person (the marriage is dead, so the partners to that agreement are the same as dead to each other).

An attorney more familiar with the Iowa Probate Code may have different knowledge of the law's application than my plain reading of the words the legislature used, but I don't believe so.

In the aftermath of a divorce, life insurance beneficiaries should ALWAYS be redesignated to make it clear what the desires of the policyowner were at that time. And especially when a remarriage will occur (or has already), if the policyowner wants to rename the departed ex-spouse, he/she has every right to do so, contrary to the desires/opinions/expectations of their new spouse.