By Brenda L. Storey,Esq.
Don’t Make Changes During the Divorce Process!
As open enrollment is right around the corner, I want to give a reminder that while a divorce case is pending, a spouse should not be dropped from plan coverage absent an agreement or court order. An Automatic Temporary Injunction goes into place with each filing, which prohibits changes to insurance. Once the Decree enters, the Injunction is lifted, and the employee spouse has an obligation to notify his/her HR of entry of the Decree. That Decree is a triggering event that allows the former spouse to elect COBRA coverage or enroll in a new plan without waiting for the next open enrollment period.
Similarly, beneficiaries should not be changed while the case is open. This includes beneficiaries of retirement plans, wills, and life insurance policies. These types of changes are sure to result in the wrath of the judge, as well as increased fees and costs. The Decree actually results in an automatic revocation of these beneficiary designations per statute. So, it is good practice to update your beneficiaries once the divorce concluded.
Other examples of potential opportunities for trouble abound with the filing of a divorce case. The best rule of thumb is to ask before acting.