Getting a divorce usually involves the need to split assets and expenses. It is always the goal that these are split in a fair and equitable manner. One aspect that needs to be reviewed is your life insurance policy. It is likely worth a lot of money. It is considered an asset as well as an expense. Because it may be difficult to figure out how to best allocate your policy, you may want to hire an experienced attorney. For knowledgeable legal counsel, contact a Morris County Divorce & Separation Law Firm today to learn more about how life insurance is typically divided when a couple gets a divorce and how our firm can help protect your assets.
How is life insurance typically divided in a divorce?
It is very important to divide your life insurance policy during a divorce. If you have children or other dependents to take care of, you want to ensure their security. Depending on the policy you have, your life insurance can be split in several ways. These policies could be worth a lot of money, and the benefit can be quite large. There are a few factors that require splitting: payouts, premiums, and ownership. The obligation of the courts is to make sure it is divided up in such a way that it is fair for both spouses and any children or dependents.
In most cases, the determination of the life insurance policy will be factored into the divorce agreement, as it is considered an asset. Certain changes may also be made, such as the allocation of the beneficiary. You may no longer wish that your spouse inherits the payout. A court may assign someone to take responsibility, making sure your children are taken care of.
Will the divorce change the life insurance beneficiary?
This is another area that depends on the situation. While the divorce will not automatically create the change, it could be determined during the divorce proceedings. You do not need to immediately cancel your policy when you are facing divorce. Consider the type of policy, your beneficiaries, and your children. You might want to maintain your policy for the sake of minor children who depend on you. If you or your spouse are amicable, he or she could remain on the policy for the sake of the children. This way your children would benefit from your life insurance in case anything were to happen to you. You may wish to keep your spouse assigned as a beneficiary if there are no children involved as well. In the case that your spouse depends on you financially and you are on good terms, this might be wise. You may wish to assign a trustee as the beneficiary if you do not trust your spouse or want to avoid future conflict.
Divorce can be a very difficult time to go through. When it comes to your life insurance, make it easier by seeking assistance. Contact our divorce and separation law firm today.