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Divorced Spouse May Be Required to Maintain Life Insurance Policy Benefitting Ex-Spouse

Life insurance policy required to be kept up after divorce

The financial implications of a divorce do not, unfortunately, end when a divorce settlement is finalized. Where alimony and child support are parts of the equation, the payments may affect the payer’s estate, requiring certain assurances or preventing the distribution of certain property in order to ensure compliance with the ordered payments. A recent opinion from a New Jersey appellate court shows some of the financial consequences of alimony and child support orders. Continue reading for an explanation of the case, and contact an experienced New Jersey family law attorney with additional questions.

Spouse Required to Keep Life Insurance Policy Even After No Longer Required by Original Divorce Order

In a case titled Mirman v. Mirman, the New Jersey Appellate Court dealt with a divorced couple fighting over the alimony and child support obligations of the divorced husband and father, Brian. While the opinion notes that it is not binding precedent for other courts, it is a useful illustration of how alimony and child support requirements can trigger additional financial and legal obligations that may not have been obvious at the outset of the divorce.

The parties in Mirman v. Mirman married in 1989, had three children, and divorced in 2004. Their final divorce judgment included a negotiated property settlement agreement (PSA), which included provisions for joint custody designating the mother, Elizabeth, as the parent of primary residence, as well as child support and alimony payments terminable in the event of the death of either party or Elizabeth’s remarriage. The PSA additionally required that Brian maintain a $1 million life insurance policy, naming Elizabeth as a beneficiary, to ensure that she would continue to receive alimony. The policy could terminate when Brian reached age 65, and at that point the issue would be “revisited.”

Children Change Residency and Wife Pays for Child Support

By 2016, one child had been emancipated, and the other two were aged 19 and were residing with Brian instead of Elizabeth. Brian, then aged 65, ceased paying child support and thereafter filed a motion for modification of his alimony requirements and to require Elizabeth to pay him child support.Elizabeth filed a cross-motion to require Brian to contribute to the cost of a life insurance policy she had taken out on Brian’s life after the previous policy was terminated when Brian turned 65.

On the issue of the life insurance policy, the family court summarily denied Elizabeth’s motion, finding that the PSA terms prohibited even considering the issue. The appellate court disagreed, finding that the PSA allowed for the parties to “revisit” the issue when Brian turned 65, and that the family court should thus conduct a full analysis of the relevant issues such as the parties’ relative incomes and any changed circumstances, such as the residence of the children. 

The appeals court also affirmed the family court’s finding that Brian still owed alimony but required that the family court consider whether Elizabeth should pay child support given that the children now reside with Brian.

If you’re facing divorce in New Jersey and want experienced legal help creating a reliable marital settlement agreement, or if you are unsure of your legal obligations following a divorce, contact the seasoned and professional Union family law attorney John B. D’Alessandro at 908-964-0102.

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