Life Insurance Policies
It is common for many couples to take out a life insurance policy on themselves, with their spouse listed as the beneficiary upon death. In the event of divorce, most spouses may cancel the policy or change beneficiaries to an immediate family member. When a life insurance policy has been set up to secure a long term obligation for a spouse, however, the policy may be characterized as marital property and subject to continuation under terms of the property settlement.
In addition, most couples commingle their income during the marriage and use their joint resources to pay the premiums on the life insurance policy. Over the duration of the marriage, the value of the whole life insurance policy may have increased substantially. No matter which spouse holds the policy, or how long they have had the policy in their name, all or some of it’s appreciated value must be characterized as joint marital property and subject to equitable distribution.Is It Always a Good Idea to Liquidate Life Insurance Policies for a Divorce Settlement?
Depending upon your age, health and goals for the policy benefits, it may serve you better to leave a life insurance policy in place and include all or part of the future benefits as part of your financial settlement.
Couples with high net worth have many complex issues to consider when heading into divorce. Make sure your lawyer understands your needs and has the skill and experience to discuss these issues clearly. At the firm of Jonathan D. Katz, Attorney at Law, I have been recognized by family law professionals throughout the Hudson Valley and the Catskill region for my knowledge and capacity to ensure clients’ rights are fully protected as they face their financial future with a fair property settlement in hand.What Do You Do About Your Life Insurance Policy in Your Divorce Settlement?
Let’s meet to discuss the complex issues that will affect your divorce property settlement, including:
- Investment accounts, stocks and bonds
- Retirement accounts, pensions, 401(k) plans and IRA accounts
- Delayed compensation income
- Tax shelters, divorce tax issues and marital debts
From my offices in New Paltz, I represent clients in family law courts throughout the Hudson Valley, the Catskills and the New York City region. Contact me today.