After divorce, most couples maintain financial obligations to each other; alimony and child support are among the most common. However, many couples overlook one important financial matter when divorcing: life insurance. Somerville divorce lawyers advise clients to maintain insurance policies on their ex-spouses to cover alimony payments and child support should an ex-spouse pass away after divorce.
Unless both spouses agree otherwise, alimony support is terminated after one spouse passes away. When the recipient’s budget accounts for regular income in the form of alimony, they can be financially devastated when that financial support ends. A life insurance payout can help to relieve the financial burden caused by an ex-spouse’s unexpected death.
Life insurance is especially important when children are involved. Life insurance payouts after a parent’s passing can not only be used to cover the regular expenses of childrearing but can also be used for future expenses, including college tuition. New Jersey divorce law provides that any property one spouse designates for their former spouse is revoked upon the entry of a judgement of divorce. A Somerville divorce lawyer can create a settlement agreement to continue life insurance policies naming an ex-spouse as the beneficiary after the marriage ends.
After both parties agree to these terms as part of their settlement agreement, it is also important to ensure the life insurance beneficiary maintains access to all documentation regarding the policy, including payment records and changes that may conflict with the divorce settlement. Insurance companies often have strict privacy restrictions that make it difficult for even the beneficiary to access policy information. A divorce attorney works on behalf of the beneficiary to transfer ownership status to the recipient, giving them direct access to the policy and the carrier.
During the divorce settlement process, couples can determine the terms of an existing life insurance policy, including beneficiary designations, coverage amounts, and premiums. Other couples may be required to obtain life insurance policies as part of their settlement or court order. Even with settlement agreements and court orders, certain spouses still fail to maintain their obligation to obtain life insurance. If that happens, a divorce lawyer would pursue litigation against their estate to protect their client.
Somerville Divorce Lawyers at Lyons & Associates, P.C. Advise Clients on Divorce Settlements and Life Insurance
When creating a divorce settlement, it is important for couples to address life insurance, along with other important financial matters of alimony and child support. Life insurance is a crucial source of financial protection should your former spouse pass away. The Somerville divorce lawyers at Lyons & Associates, P.C. help ensure that you and your children are provided for after divorce.
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We proudly serve clients throughout the state of New Jersey, including Somerset County, Morris County, Union County, and the towns of Bridgewater, Basking Ridge, Chatham, Madison, Mendham, Morristown, Parsippany, Randolph, Rockaway, Short Hills, Somerville, South Plainfield, and Woodbridge.