Insurance Policy

After the Jugde has ruled in a pre-trial life time maintainence for a 56 year old woman has there ever been a ruling that the judge has ordered the husband to buy life insurance on himself naming the ex-wife benefficiariary? Can the Judge put this into a divorce decree? And who would monitor that the policy would be paid?

Its common for a court to mandate that the ex spouse that is paying alimony or child support purchase life insurance. If the payor ex spouse dies, how will the payee surviving spouse get by financially without insurance? That is the issue the court is trying to address. Most divorce agreements don't go into nearly enough detail. What type of insurance is being purchased? Might the husband/insured by cheap one year renewable term and then when it gets too costly petition the court to stop having to provide it? Well, if the court did not mandate 10, 20- or longer year guaranteed renewable term, or a permanent policy can it? Might the husband/insured get the cheapest policy available regardless of the financial health of the insurance company? The monitoring issue is also often ignored. How does the beneficiary spouse know its being done? There are even more issues typically ignored. What about the possiblity of a suit or claim on the insured/husband's estate eating up the policy? What about the inclusion of the insurance in the husband/insured's estate for tax or other purposes? Will there be an offsetting deduction (a marital deduction is obviously no longer available). A great solution to many of these problems is to have an irrevocable insurance trust set up as part of the divorce settlement and name a bank as an indpendent trustee to protect everyone. If the parties can cooperate enough, and the financial status warrants it, this is really the best option for all (especially the kids if there are children involved). Unfortunately, this approach is not really used that often. There is a great article addressing this in detail in a newsletter called Matrimonial Strategist with Shenkman as the co-author.