October 8, 2019

You have probably planned your life carefully up to this point and put in time and energy with your former spouse to drop a will and establish trust to organize your estate after you pass away.

Together you’ve probably put insurance policies in place for life, health and disability and made decisions about the guardianship of your children should anything happen to you before the children are old enough to care for themselves. With all of these planning opportunities you have already taken advantage of, it can be frustrating to realize that the only thing you didn’t plan for was divorce.

Your estate plan must be amended and updated following a divorce to ensure that your wishes are truly protected during the process of separation and divorce. Life insurance is one such component of your plan that probably requires some amendments. Be clear on how the life insurance is paid for and what it guarantees. Any person who owns the policy is, therefore, responsible for keeping the policy active and enforced and for paying premiums. The same person also exercises the authority to change beneficiaries.

If your ex passes away prematurely, life insurance could become an important component of your divorce settlement to verify that you and your family are paid for.

Life insurance can also help to guarantee the continued flow of child support or alimony or both as outlined by the divorce settlement. It is strongly recommended that you have a trust established as the owner of the life insurance policy to avoid gaps and pitfalls in insurance coverage planning that could arise during and after a divorce. Schedule a consultation with an experienced New Jersey estate planning lawyer to further discuss how this affects your case.