! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines (PDF) for remote public comment and virtual meeting instructions (PDF).

Download Zipped Enrolled WordPerfect HB0065.ZIP
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 65 Enrolled

             1     

INSURANCE BENEFICIARY CHANGES

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jim Bird

             5     
Senate Sponsor: Wayne A. Harper

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill requires a life insurance or annuity policyholder to change a beneficiary
             10      according to the insurer's requirements after a divorce or annulment.
             11      Highlighted Provisions:
             12          This bill:
             13          .    exempts life insurance policies and annuity contracts from the operation of Section
             14      75-2-804 ;
             15          .    requires a policyholder or contract holder to follow the insurer's requirements for
             16      changing beneficiaries after a divorce;
             17          .    requires a judge in a divorce to ask parties about insurance or annuities; and
             18          .    makes technical corrections.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          30-3-5, as last amended by Laws of Utah 2010, Chapter 285
             26          31A-22-413, as last amended by Laws of Utah 2006, Chapter 62
             27          75-2-804, as repealed and reenacted by Laws of Utah 1998, Chapter 39
             28     
             29      Be it enacted by the Legislature of the state of Utah:


             30          Section 1. Section 30-3-5 is amended to read:
             31           30-3-5. Disposition of property -- Maintenance and health care of parties and
             32      children -- Division of debts -- Court to have continuing jurisdiction -- Custody and
             33      parent-time -- Determination of alimony -- Nonmeritorious petition for modification.
             34          (1) When a decree of divorce is rendered, the court may include in it equitable orders
             35      relating to the children, property, debts or obligations, and parties. The court shall include the
             36      following in every decree of divorce:
             37          (a) an order assigning responsibility for the payment of reasonable and necessary
             38      medical and dental expenses of the dependent children including responsibility for health
             39      insurance out-of-pocket expenses such as co-payments, co-insurance, and deductibles;
             40          (b) (i) if coverage is or becomes available at a reasonable cost, an order requiring the
             41      purchase and maintenance of appropriate health, hospital, and dental care insurance for the
             42      dependent children; and
             43          (ii) a designation of which health, hospital, or dental insurance plan is primary and
             44      which health, hospital, or dental insurance plan is secondary in accordance with the provisions
             45      of Section 30-3-5.4 which will take effect if at any time a dependent child is covered by both
             46      parents' health, hospital, or dental insurance plans;
             47          (c) pursuant to Section 15-4-6.5 :
             48          (i) an order specifying which party is responsible for the payment of joint debts,
             49      obligations, or liabilities of the parties contracted or incurred during marriage;
             50          (ii) an order requiring the parties to notify respective creditors or obligees, regarding
             51      the court's division of debts, obligations, or liabilities and regarding the parties' separate,
             52      current addresses; and
             53          (iii) provisions for the enforcement of these orders; [and]
             54          (d) provisions for income withholding in accordance with Title 62A, Chapter 11,
             55      Recovery Services[.]; and
             56          (e) if either party owns a life insurance policy or an annuity contract, an
             57      acknowledgment by the court that the owner:


             58          (i) has reviewed and updated, where appropriate, the list of beneficiaries;
             59          (ii) has affirmed that those listed as beneficiaries are in fact the intended beneficiaries
             60      after the divorce becomes final; and
             61          (iii) understands that if no changes are made to the policy or contract, the beneficiaries
             62      currently listed will receive any funds paid by the insurance company under the terms of the
             63      policy or contract.
             64          (2) The court may include, in an order determining child support, an order assigning
             65      financial responsibility for all or a portion of child care expenses incurred on behalf of the
             66      dependent children, necessitated by the employment or training of the custodial parent. If the
             67      court determines that the circumstances are appropriate and that the dependent children would
             68      be adequately cared for, it may include an order allowing the noncustodial parent to provide
             69      child care for the dependent children, necessitated by the employment or training of the
             70      custodial parent.
             71          (3) The court has continuing jurisdiction to make subsequent changes or new orders for
             72      the custody of the children and their support, maintenance, health, and dental care, and for
             73      distribution of the property and obligations for debts as is reasonable and necessary.
             74          (4) Child support, custody, visitation, and other matters related to children born to the
             75      mother and father after entry of the decree of divorce may be added to the decree by
             76      modification.
             77          (5) (a) In determining parent-time rights of parents and visitation rights of grandparents
             78      and other members of the immediate family, the court shall consider the best interest of the
             79      child.
             80          (b) Upon a specific finding by the court of the need for peace officer enforcement, the
             81      court may include in an order establishing a parent-time or visitation schedule a provision,
             82      among other things, authorizing any peace officer to enforce a court-ordered parent-time or
             83      visitation schedule entered under this chapter.
             84          (6) If a petition for modification of child custody or parent-time provisions of a court
             85      order is made and denied, the court shall order the petitioner to pay the reasonable attorneys'


             86      fees expended by the prevailing party in that action, if the court determines that the petition
             87      was without merit and not asserted or defended against in good faith.
             88          (7) If a petition alleges noncompliance with a parent-time order by a parent, or a
             89      visitation order by a grandparent or other member of the immediate family where a visitation or
             90      parent-time right has been previously granted by the court, the court may award to the
             91      prevailing party costs, including actual attorney fees and court costs incurred by the prevailing
             92      party because of the other party's failure to provide or exercise court-ordered visitation or
             93      parent-time.
             94          (8) (a) The court shall consider at least the following factors in determining alimony:
             95          (i) the financial condition and needs of the recipient spouse;
             96          (ii) the recipient's earning capacity or ability to produce income;
             97          (iii) the ability of the payor spouse to provide support;
             98          (iv) the length of the marriage;
             99          (v) whether the recipient spouse has custody of minor children requiring support;
             100          (vi) whether the recipient spouse worked in a business owned or operated by the payor
             101      spouse; and
             102          (vii) whether the recipient spouse directly contributed to any increase in the payor
             103      spouse's skill by paying for education received by the payor spouse or allowing the payor
             104      spouse to attend school during the marriage.
             105          (b) The court may consider the fault of the parties in determining alimony.
             106          (c) As a general rule, the court should look to the standard of living, existing at the
             107      time of separation, in determining alimony in accordance with Subsection (8)(a). However, the
             108      court shall consider all relevant facts and equitable principles and may, in its discretion, base
             109      alimony on the standard of living that existed at the time of trial. In marriages of short
             110      duration, when no children have been conceived or born during the marriage, the court may
             111      consider the standard of living that existed at the time of the marriage.
             112          (d) The court may, under appropriate circumstances, attempt to equalize the parties'
             113      respective standards of living.


             114          (e) When a marriage of long duration dissolves on the threshold of a major change in
             115      the income of one of the spouses due to the collective efforts of both, that change shall be
             116      considered in dividing the marital property and in determining the amount of alimony. If one
             117      spouse's earning capacity has been greatly enhanced through the efforts of both spouses during
             118      the marriage, the court may make a compensating adjustment in dividing the marital property
             119      and awarding alimony.
             120          (f) In determining alimony when a marriage of short duration dissolves, and no
             121      children have been conceived or born during the marriage, the court may consider restoring
             122      each party to the condition which existed at the time of the marriage.
             123          (g) (i) The court has continuing jurisdiction to make substantive changes and new
             124      orders regarding alimony based on a substantial material change in circumstances not
             125      foreseeable at the time of the divorce.
             126          (ii) The court may not modify alimony or issue a new order for alimony to address
             127      needs of the recipient that did not exist at the time the decree was entered, unless the court
             128      finds extenuating circumstances that justify that action.
             129          (iii) In determining alimony, the income of any subsequent spouse of the payor may not
             130      be considered, except as provided in this Subsection (8).
             131          (A) The court may consider the subsequent spouse's financial ability to share living
             132      expenses.
             133          (B) The court may consider the income of a subsequent spouse if the court finds that
             134      the payor's improper conduct justifies that consideration.
             135          (h) Alimony may not be ordered for a duration longer than the number of years that the
             136      marriage existed unless, at any time prior to termination of alimony, the court finds extenuating
             137      circumstances that justify the payment of alimony for a longer period of time.
             138          (9) Unless a decree of divorce specifically provides otherwise, any order of the court
             139      that a party pay alimony to a former spouse automatically terminates upon the remarriage or
             140      death of that former spouse. However, if the remarriage is annulled and found to be void ab
             141      initio, payment of alimony shall resume if the party paying alimony is made a party to the


             142      action of annulment and his rights are determined.
             143          (10) Any order of the court that a party pay alimony to a former spouse terminates
             144      upon establishment by the party paying alimony that the former spouse is cohabitating with
             145      another person.
             146          Section 2. Section 31A-22-413 is amended to read:
             147           31A-22-413. Designation of beneficiary.
             148          (1) Subject to Subsection 31A-22-412 (2), no life insurance policy or annuity contract
             149      may restrict the right of a policyholder or certificate holder:
             150          (a) to make an irrevocable designation of beneficiary effective immediately or at some
             151      subsequent time; or
             152          (b) if the designation of beneficiary is not explicitly irrevocable, to change the
             153      beneficiary without the consent of the previously designated beneficiary. Subsection
             154      75-6-201 (1)(c) applies to designations by will or by separate writing.
             155          (2) (a) An insurer may prescribe formalities to be complied with for the change of
             156      beneficiaries, but those formalities may only be designed for the protection of the insurer.
             157      [The] Notwithstanding Section 75-2-804 , the insurer discharges its obligation under the
             158      insurance policy or certificate of insurance if it pays the properly designated beneficiary unless
             159      it has actual notice of either an assignment or a change in beneficiary designation made
             160      pursuant to Subsection (1)(b) [or Section 75-2-804 ].
             161          (b) The insurer has actual notice if the formalities prescribed by the policy are
             162      complied with, or if the change in beneficiary has been requested in the form prescribed by the
             163      insurer and delivered to an agent representing the insurer at least three days prior to payment to
             164      the earlier properly designated beneficiary.
             165          Section 3. Section 75-2-804 is amended to read:
             166           75-2-804. Definitions -- Revocation of probate and nonprobate transfers by
             167      divorce -- Effect of severance -- Revival -- Protection of payors, third parties, and bona
             168      fide purchasers -- Personal liability of recipient -- No revocation by other changes of
             169      circumstances -- No revocation of life insurance beneficiary.


             170          (1) As used in this section:
             171          (a) "Disposition or appointment of property" includes a transfer of an item of property
             172      or any other benefit to a beneficiary designated in a governing instrument.
             173          (b) "Divorce or annulment" means any divorce or annulment, or any dissolution or
             174      declaration of invalidity of a marriage, that would exclude the spouse as a surviving spouse
             175      within the meaning of Section 75-2-802 . A decree of separation that does not terminate the
             176      status of husband and wife is not a divorce for purposes of this section.
             177          (c) "Divorced individual" includes an individual whose marriage has been annulled.
             178          (d) "Governing instrument" means a governing instrument executed by the divorced
             179      individual before the divorce or annulment of [his] the individual's marriage to [his] the
             180      individual's former spouse.
             181          (e) "Relative of the divorced individual's former spouse" means an individual who is
             182      related to the divorced individual's former spouse by blood, adoption, or affinity and who, after
             183      the divorce or annulment, is not related to the divorced individual by blood, adoption, or
             184      affinity.
             185          (f) "Revocable," with respect to a disposition, appointment, provision, or nomination,
             186      means one under which the divorced individual, at the time of the divorce or annulment, was
             187      alone empowered, by law or under the governing instrument, to cancel the designation in favor
             188      of [his] the individual's former spouse or former spouse's relative, whether or not the divorced
             189      individual was then empowered to designate [himself] another in place of [his] the individual's
             190      former spouse or in place of [his] the individual's former spouse's relative and whether or not
             191      the divorced individual then had the capacity to exercise the power.
             192          (2) Except as provided by the express terms of a governing instrument, a court order,
             193      or a contract relating to the division of the marital estate made between the divorced
             194      individuals before or after the marriage, divorce, or annulment, the divorce or annulment of a
             195      marriage:
             196          (a) revokes any revocable:
             197          (i) disposition or appointment of property made by a divorced individual to [his] the


             198      individual's former spouse in a governing instrument and any disposition or appointment
             199      created by law or in a governing instrument to a relative of the divorced individual's former
             200      spouse;
             201          (ii) provision in a governing instrument conferring a general or nongeneral power of
             202      appointment on the divorced individual's former spouse or on a relative of the divorced
             203      individual's former spouse; and
             204          (iii) nomination in a governing instrument, [nominating] which nominates a divorced
             205      individual's former spouse or a relative of the divorced individual's former spouse to serve in
             206      any fiduciary or representative capacity, including a personal representative, executor, trustee,
             207      conservator, agent, or guardian; and
             208          (b) severs the interests of the former spouses in property held by them at the time of the
             209      divorce or annulment as joint tenants with the right of survivorship, transforming the interests
             210      of the former spouses into tenancies in common.
             211          (3) A severance under Subsection (2)(b) does not affect any third-party interest in
             212      property acquired for value and in good faith reliance on an apparent title by survivorship in the
             213      survivor of the former spouses unless a writing declaring the severance has been noted,
             214      registered, filed, or recorded in records appropriate to the kind and location of the property,
             215      which are relied upon, in the ordinary course of transactions involving such property, as
             216      evidence of ownership.
             217          (4) Provisions of a governing instrument are given effect as if the former spouse and
             218      relatives of the former spouse disclaimed all provisions revoked by this section or, in the case
             219      of a revoked nomination in a fiduciary or representative capacity, as if the former spouse and
             220      relatives of the former spouse died immediately before the divorce or annulment.
             221          (5) Provisions revoked solely by this section are revived by the divorced individual's
             222      remarriage to the former spouse or by a nullification of the divorce or annulment.
             223          (6) No change of circumstances other than as described in this section and in Section
             224      75-2-803 effects a revocation.
             225          (7) (a) A payor or other third party is not liable for having made a payment or


             226      transferred an item of property or any other benefit to a beneficiary designated in a governing
             227      instrument affected by a divorce, annulment, or remarriage, or for having taken any other
             228      action in good faith reliance on the validity of the governing instrument, before the payor or
             229      other third party received written notice of the divorce, annulment, or remarriage. A payor or
             230      other third party is liable for a payment made or other action taken after the payor or other third
             231      party received written notice of a claimed forfeiture or revocation under this section.
             232          (b) Written notice of the divorce, annulment, or remarriage under Subsection (7)(a)
             233      shall be mailed to the payor's or other third party's main office or home by registered or
             234      certified mail, return receipt requested, or served upon the payor or other third party in the
             235      same manner as a summons in a civil action. Upon receipt of written notice of the divorce,
             236      annulment, or remarriage, a payor or other third party may pay any amount owed or transfer or
             237      deposit any item of property held by it to or with the court having jurisdiction of the probate
             238      proceedings relating to the decedent's estate or, if no proceedings have been commenced, to or
             239      with the court having jurisdiction of probate proceedings relating to the decedent's estates
             240      located in the county of the decedent's residence. The court shall hold the funds or item of
             241      property and, upon its determination under this section, shall order disbursement or transfer in
             242      accordance with the determination. Payments, transfers, or deposits made to or with the court
             243      discharge the payor or other third party from all claims for the value of amounts paid to or
             244      items of property transferred to or deposited with the court.
             245          (8) (a) A person who purchases property from a former spouse, relative of a former
             246      spouse, or any other person for value and without notice, or who receives from a former
             247      spouse, relative of a former spouse, or any other person a payment or other item of property in
             248      partial or full satisfaction of a legally enforceable obligation, is neither obligated under this
             249      section to return the payment, item of property, or benefit, nor is liable under this section for
             250      the amount of the payment or the value of the item of property or benefit. But a former spouse,
             251      relative of a former spouse, or other person who, not for value, received a payment, item of
             252      property, or any other benefit to which that person is not entitled under this section is obligated
             253      to return the payment, item of property, or benefit, or is personally liable for the amount of the


             254      payment or the value of the item of property or benefit, to the person who is entitled to it under
             255      this section.
             256          (b) If this section or any part of this section is preempted by federal law with respect to
             257      a payment, an item of property, or any other benefit covered by this section, a former spouse,
             258      relative of the former spouse, or any other person who, not for value, received a payment, item
             259      of property, or any other benefit to which that person is not entitled under this section is
             260      obligated to return that payment, item of property, or benefit, or is personally liable for the
             261      amount of the payment or the value of the item of property or benefit, to the person who would
             262      have been entitled to it were this section or part of this section not preempted.


[Bill Documents][Bills Directory]