Life Insurance and Your Florida Divorce

Working through the details of a divorce settlement with your soon-to-be-ex and your attorneys is likely to be a stressful and somewhat lengthy process. Divorcing individuals tend to focus on what they perceive as the most important points in their divorce agreement, including the timesharing arrangements for the parties’ children and allocation of property and debts. However, life insurance is an important topic that you should not overlook when negotiating your divorce settlement.

Life Insurance Policy to Secure Support

Florida courts do have the authority to require a divorcing spouse who pays support to acquire a life insurance policy to secure his or her support obligations, generally on the theory that the spouse receiving the support would experience financial hardship if the paying spouse died and support was no longer being paid. As a result, it is fairly common for a divorce settlement agreement to include a provision for one spouse to both obtain and maintain a life insurance policy in an amount that would cover child support and spousal support expenses in the event that he or she passed away. In computing this amount, you may also want to consider future post-secondary education expenses for children, if your settlement provides for payment of these expenses, as well as other marital debts that might go unpaid. While Florida law holds that a divorce court cannot force a spouse to maintain a life insurance policy in an amount that is more than the amount of child support that he or she is ordered to pay, this is a point that you can negotiate with your ex in the settlement agreement.

Problems with Life Insurance and Divorce

A number of problems can arise when a life insurance policy is part of a divorce settlement. For instance, if your ex-spouse neglects to or is unable to pay the premiums, you may be unaware that the coverage has lapsed, that is, until your ex unexpectedly passes away. One way to potentially avoid this problem is to ensure that you are listed as a contact person on the policy, as well as the beneficiary, which will prompt the insurance company to notify you if the premiums go unpaid. Most insurance companies will gladly agree to do this, as they want to keep their policies paid and in force.

If at all possible, try and ensure that your ex acquires the necessary life insurance policy before the settlement agreement is approved by the court and your divorce becomes final. All too often, an ex-spouse can go to purchase an insurance policy and be denied for health reasons, or be subject to a much higher premium than anticipated. It is best to try and iron out these difficulties and get proof from your ex that the insurance policy is in place before the divorce becomes final.

Another problem that can arise is if your ex remarries and makes his or her new spouse the beneficiary of the life insurance policy. Whomever owns the policy, which is typically your ex, has the power to change beneficiaries without any notice to prior beneficiaries. One way to remedy this issue is to insist that you be named as the owner of the policy and require that your ex simply pay the premiums as the insured person. If you are the owner, you can control any beneficiary changes and will know if your ex doesn’t pay the premiums or the policy lapses.

Call Your Fort Lauderdale Divorce Lawyer for Help

Sufficient life insurance to cover an ex-spouse’s support obligations is an essential component of a reasonable Florida divorce settlement agreement. This provision helps to ensure your family’s financial future if your ex-spouse unexpectedly passes away and is unable to comply with his or her court-ordered support obligations. At the Vanessa L. Prieto Law Offices, LLC, we have the knowledge and experienced to properly handle these issues and resolve them to your advantage. Contact your Florida divorce attorney at the Vanessa L. Prieto Law Offices, LLC, right away, and learn how we can assist you with all issues related to your divorce.