Review insurance for dependants and your will during divorce or dissolution

It’s important to work out whether you need life insurance, or if the insurance you do have is enough cover. If you and your ex-partner (husband, wife or civil partner) had a mortgage together, you might also have had a joint life insurance policy to go with it.

When you separate, you can’t divide a life insurance policy – one of you has to take it over or it needs to be cancelled. That means the other partner could be without life insurance.

If, after you separate, you have children or anyone else who depends on you financially or you have a joint mortgage with a new partner, it’s worth considering taking out life insurance.

Consider taking out life insurance to cover your ex-partner’s life if you receive spousal maintenance (periodical allowance in Scotland) and/or child maintenance payments from them.

You or your ex-partner could take out a policy that pays a lump sum, or one that pays you an income for a specific length of time (perhaps until the payments were due to end).

Life insurance that pays an income rather than a lump sum is called ‘family income benefit’ insurance.

Your workplace might pay out a lump sum if you were to die while you’re employed.

You normally have to say who you’d like to receive this lump sum. This is often your husband, wife or civil partner.

Check whether you want to change that after you’ve separated.

Until your divorce or dissolution is finalised, your existing will is still valid. Once you’re divorced or your civil partnership has been dissolved (decree absolute), any money or property you’ve left to your ex-husband, wife or civil partner won’t go to them.

In some instances, one spouse will have to pay the ex-partner former spouse maintenance or periodical payments following the divorce. In that case, the former spouse is still a ‘dependant’ and therefore your current will may need to be changed to take that into account; otherwise, a former spouse could make an application to the courts on the basis that the will does not make reasonable financial provision for them.

Not changing your will might mean that any gift granted to them, will automatically go to the person who is to receive anything in your will that isn’t left to a designated person (the remaining or substitute residuary beneficiary). If there are none, your estate will be passed on via the intestacy rules.

But if you don’t have any formal financial settlement, an ex-partner can make a claim under the Inheritance (Provision for Family and Dependants) Act 1975 for a portion of the inheritance, if they haven’t remarried and if the claim is brought within six months of the grant of probate. 

To prevent this, you can get a consent order, which states how you intend to separate your assets and finances when ending your marriage and is made by agreement. 

If you named your ex-partner or civil partner as a trustee or executor of your will, your divorce will, in most cases, revoke their appointment. 

This could leave the will without executors if your ex-partner was a sole executor, or with too few executors if the ex-partner was one of two executors and the estate needs more than the one remaining executor. This might create extra complications following your death. 

Even if your ex-partner is not an executor in your will, if you have not appointed one or more executors after the divorce is finalised, there is a risk that your ex-partner (if he/she is the guardian to your minor young children) will be able to take charge of your estate if it is left to those children.

The rest of your will is still valid. For example, if you’ve left money to your ex-partner’s family, they would still receive that inheritance if you died without making a new will.

In some instances, one spouse will have to pay the ex-partner maintenance or periodical payments following the divorce. In that case, the former spouse is still a ‘dependant’ and therefore your current will may need to be changed to take that into account; otherwise, a former spouse could make an application to the courts on the basis that the will does not make reasonable financial provision for them.

Consider making an interim will while your divorce or dissolution is ongoing.

If you marry again or form a civil partnership, any will you have would normally be automatically cancelled.

If you die without making a new will, your money and possessions will pass in accordance with intestacy rules. This might not reflect your wishes.

It’s a good idea to make a new will straight after your divorce to ensure your assets are distributed as you want them to be.

If you’re only going to make very minor changes, instead of creating a new will, you can add what’s called a ‘codicil’.

If you want to make major changes to your will – such as leaving money or possessions to someone else – you’re probably better off drawing up a new one. Make sure that you say that this new will revokes any earlier wills.

If you don’t have a will, it’s worth thinking about getting one drawn up.

If you don’t have a will when you die, your money and possessions will be passed on according to the law.

This can result in some complicated arrangements, for example between first and second families. And that might not be what you want.

• Your children could inherit everything if you don’t marry or enter a civil partnership.
• If you do remarry or enter a new civil partnership, your new husband, wife or civil partner could receive some or all of your money and property.
• If you live with a new partner without marrying or entering a civil partnership they would not have an automatic right to inherit, if you don’t have a will.