Are You Receiving Alimony or Child Support in Your New Jersey Divorce? Don’t Forget About Life Insurance
If you are getting divorced in New Jersey and will be receiving alimony and/or child support, those things will end by necessity when your spouse dies.
However, in the unfortunate event that your spouse dies when you are still receiving the alimony and/or child support, however, your need for that support of course does not disappear.
That is why the New Jersey support statute (N.J.S.A 2A:34-23) permits a New Jersey Family Court to require “reasonable security” for alimony and child support payments. The same statute also permits a New Jersey Family Court to take certain actions if the supporting spouse does not follow the Court’s order to provide the “reasonable security.”
Although N.J.S.A 2A:34-23 does not expressly reference life insurance as one of the security devices, life insurance is the most frequently used security device because it does not require that a marital asset be set aside and therefore remain unavailable to the supporting spouse for other purposes.
How much should the death benefit be for that life insurance? That depends on the amount of the obligation that is being protected.
Obviously, if you are receiving only 3 years of alimony and the amount of that alimony is $500 per month, the amount of required life insurance is considerably less than what would be required by someone who will receive alimony of $5,000 per month for 20 years.
The same logic applies to child support. However, when there are minor children, life insurance can and should be used to also secure the payment of their health care and college expenses in the event of the supporting spouse’s untimely death.
It is extremely important that the party who is receiving the alimony and/or child support be immediately made aware if the supporting spouse fails to pay the requisite life insurance premiums or otherwise makes a change to the life insurance policy. Whenever possible, the best way to achieve that is to designate the spouse who is receiving the alimony and/or child support as the “owner” of the policy, rather than simply the “beneficiary” or the “insured.” This permits that party to receive all notices/communications from the insurance company, including invoices, notices of proposed cancellation, change in policy terms and renewal dates.
All of these issues require expert assistance. Life insurance and its relationship to divorce, alimony and child support can be tricky. Salvaggio Law Group devotes its entire practice to New Jersey Family Law matters, including those involving alimony and child support. If you want to talk, please call us at 973-447-4981 or fill out the Contact Form on our firm’s website.