Making changes to life insurance during the divorce process

| Jun 12, 2020 | divorce

There are certain things and documents that are likely to be affected when a couple make the decision to end their marriage. With so many issues on the table during a divorce situation, some Missouri couples might forget about any life insurance policies that are certain to need tweaking as a couple moves through the divorce process. This needs to be taken care of, especially if minor children are a part of the picture.

The first thing to do is to think about changing beneficiary designations. Most often a spouse is named as a beneficiary and it’s unlikely that anyone would leave a divorced partner as a beneficiary, except in specific instances.  A policy might be changed to ensure the kids get the inheritance; it might stay the same as a means of covering alimony if necessary. One thing to note, however — beneficiary changes can only be made if the policy is revocable or the designated beneficiary agrees to the change.

The cash value of a policy is taken into consideration when ascertaining a person’s net worth. It should be included among what marital assets should be divided, so each person gets half the cash value. When it comes to protecting child support and alimony income, the person who has custody of the children might wish to maintain a life insurance policy on his or her former spouse with a high enough benefit to replace support income, just in case. 

A Missouri attorney can further explain how life insurance policies work during a divorce. These should be included among those documents that might need changing after a divorce has taken place. A lawyer will always work to ensure the best for his or her clients and that includes offering advice when it comes to things that might be affected by divorce.