Helping Clients Navigate A Course To A Better Future

You’re getting divorced — why do you need a life insurance policy on your ex?

You and your spouse are hashing out the specifics of your divorce. Based on income and/or other circumstances, you are due spousal support from your ex. But, you shouldn’t stop the negotiations there.

Your family law attorney can petition the court to have your ex-spouse take out a life insurance policy naming you as the beneficiary. That can understandably make some exes very nervous. But the premise of the situation is that money will be paid out in lieu of the spousal support you will no longer receive once your ex passes away.

Why this is a fair proposition

If you were married for 20 or 30 years to your spouse, you may have given up your career (or the pursuit of one) to take care of the kids and the home. Finding a job with a decent salary later in life when your skills are rusty at best is quite challenging. In fact, that is why the court-ordered spousal support to be paid to you.

But if your spouse suddenly dies, your alimony ends at death, and that leaves you in a very financially precarious position. Hence, the life insurance policy will pay out a lump sum for you to invest and manage so that it provides you with sufficient funds to live your life.

Your children can be included, too

The same principle is frequently why parents who divorce agree to take out life insurance policies with their minor children as beneficiaries.

While the money they receive will never compensate the kids for the flesh and blood parent they lost, the proceeds from the policy cover the child support they will no longer receive. It can even be structured so that the money is designated for their educational expenses. In fact, it could be the difference between covering the tuition at a private school or getting an insufficient education at a so-so public school.

Make sure that your attorney submits this request to the court before your divorce becomes final so that you know that you and your children will be financially protected come what may.

Categories

Archives