The U.S. Supreme Court has weighed in on the beneficiary designation of an ex-spouse (Sveen v. Melin.) The case addressed a Minnesota Law that states if one spouse has made the other the beneficiary of a life insurance policy or similar asset before a divorce, their divorce automatically revokes that designation so that the insurance proceeds instead go to the contingent beneficiary upon their death. Texas has a very similar law. The plaintiff’s in the case argued that this amounted to the state violated the Contracts Clause which restricts the powers of the states to disrupt contractual relationships. The Court disagreed pointing out that the law was more likely to reflect the policyholders intent since the event of a divorce presupposes the the divorcee does not want a prior partner to receive their life insurance proceeds.
It should be pointed out that the Minnesota law and the current Texas law allow for benefits of a life insurance policy to go to an ex-spouse if the designation is made after the divorce. Regardless, one of the fist things a newly divorced person should do is change their beneficiary designations.