divorce, one aspect that is most likely not considered as much as it should be
is life insurance matters. Before filing for divorce, it is helpful to
gather all available information regarding the type of life insurance
you and your children have. A spiteful spouse may try to cancel or change
the beneficiary of your life insurance before or after the final divorce
settlement is reached. To prevent this from happening, these issues should
be addressed by your attorney and financial planner.
If the client requires continuing support or spousal support as part of
their divorce settlement, it is suggested for them to work with their
attorney to prevent maintenance from being terminated in the event of
the payor's death. The divorce decree must thoroughly outline the
amount of support that will be granted in the event that the payor dies
before the term has expired. Experts suggest putting the proper terms
in the decree to ensure spousal support payable postmortem or payable
in an amount to guarantee the payor's obligations if they would have
lived to the end of the stated term.
It is also advised that the payor creates an authorization letter permitting
the payee or their agents to communicate directly with the life insurance
company in regards to any aspect of the policy. If this is not completed,
the life insurance company will normally refuse to communicate with anyone
other than the owner of the policy. Individuals in this situation should
classify who is going to follow through on the life insurance arrangements,
and confirm everything in writing. They should at least get proof of insurance
before the decree is signed. If the individual is buying a new policy,
they need to ensure that it is in effect before the decree is signed and
the divorce is finalized. Insurance companies require that there is an
insurable interest, which means that you cannot buy life insurance for
The individual should also get confirmation from their insurance company
that shows they will honor the terms in the decree. If the insurance company
will not honor the agreement, you may want to pursue legal action before
the divorce settlement is made. Another option is to designate the beneficiary
as the owner of the insurance policy—at least until the end of the
spousal maintenance term. This will have to be negotiated as part of the
final divorce settlement agreement, and will give the beneficiary designation
and paying premiums to keep the policy in place.
At Zendeh Del Law Firm, PLLC, we recognize how complicated it can be to navigate
through the divorce process. There are numerous things to consider, and
when not all factors are addressed, an issue could arise in the future.
If you would like to find out more about divorce and your life insurance
matters, do not hesitate to contact our
Plano family lawyers today.