AZ Law re Life Ins Benef

Does Arizona State law mandate that a current spouse be designated the beneficiary on a life policy?


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  • Great question! With the caveat that I'm stepping a little bit outside my element, as this question falls more securely in estate and property law than employment law, I absolutely welcome others' input in addition to mine.

    In theory, you can name anyone you desire as your beneficiary, whether spouse, children, a trust, the estate, your dog, etc. However, as you probably surmised, community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin) hold that income and property acquired during the marriage is owned equally by each spouse.

    So, in Arizona, if an employee simply names someone other than his/her spouse as beneficiary to the policy, it's not illegal for him or her to do so; however, these community property rules may still grant the surviving spouse a legal interest to a portion of the benefit, and the payout of the benefit will be delayed until these conflicting claims are resolved.

    However, community property rights can be waived, so a signed, written statement from the employee's spouse waiving his/her rights to the life insurance payout will prevent this from happening. Some insurance forms take care of this by including a spousal consent section for those community property states, so you may check with your benefits administrator/insurance company to see if they have a standard form for this or if it's part of the standard insurance form.

    On a related note, we'll be adding details on state group life insurance requirements (including employer contribution requirements, minimum group size, and dependent coverage) to the upcoming [b][i]2012[/b][/i] edition of [url=]Fifty Employment Laws in Fifty States[/url], which will be available in February of next year.
  • Holly, thank you for such a thorough answer to my question. I appreciate it!
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