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Dependent Status of Custodial Stepchild


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Hi.  We have an employee that approached us with the following request and situation:  she is the stepmother of a child.  She and the father are no longer married.  She has a court order awarding joint legal custody to the mother, father, and herself (stepmother).  Primary physical custody has been awarded to her (stepmother).  The employee (stepmother) wants to add the child as a dependent beneficiary to her employer-provided life insurance policy.  Our policy language requires that the non-biological parent be a legal guardian or that the step-mother be married to the natural parent.  The court order is a custody order and not an appointment of legal guardianship.  

Any thoughts?

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It is hard for me to imagine a court order awarding custody without some language which has the effect of guardianship.  I would think it best that you talk to the lawyer that represented the child in the custody proceedings, if there is one (guardian ad litem). 

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I am not a health and welfare person but am very curious--can't anyone be named as a life insurance beneficiary regardless of relationship?  I can see why there are strict requirements for something like medical coverage, but why does the life insurance company care.  (And kudos to that employee!)

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On 12/31/2019 at 8:51 AM, waid10 said:

Hi.  We have an employee that approached us with the following request and situation:  she is the stepmother of a child.  She and the father are no longer married.  She has a court order awarding joint legal custody to the mother, father, and herself (stepmother).  Primary physical custody has been awarded to her (stepmother).  The employee (stepmother) wants to add the child as a dependent beneficiary to her employer-provided life insurance policy.  Our policy language requires that the non-biological parent be a legal guardian or that the step-mother be married to the natural parent.  The court order is a custody order and not an appointment of legal guardianship.  

Any thoughts?

A little confused, I have never heard of a “dependent beneficiary” as a term.  Is the stepmother asking to add the child as a beneficiary or is she asking the for dependent life insurance coverage for the child?  

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You should speak with someone with family law expertise for definitive advice but, in most cases and states, custody does NOT equal guardianship.  Guardianship is a legal process that in most cases takes a number of months to complete while designations of custody can usually be arranged much faster.

This issue comes up often with respect to health plan eligibility as many plans include legal guardianship as an eligible class but are silent on legal custody.

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