life insurance

[Bali Hai]

What is the name of your state (only U.S. law)? New York

If you are court ordered to retain life insurance on yourself to satisfy an alimony judgement with ex as beneficiary in the event of your death, can you claim any part of the premium as an income tax deduction?

 

[LdiJ]

What is the name of your state (only U.S. law)? New York

If you are court ordered to retain life insurance on yourself to satisfy an alimony judgement with ex as beneficiary in the event of your death, can you claim any part of the premium as an income tax deduction?

Without doing any extra research on the topic I do not believe its possible. There is no guarantee that the spouse will ever benefit from the insurance, because there is no guarantee which one of you will pass away first, and life insurance is not deductible in any ordinary way.

Other forms of insurance provide more immediate benefits and/or are required by law, (ie car insurance, medical insurance etc) and medical insurance is deductible in a more ordinary way as well.

 

[Bali Hai]

Without doing any extra research on the topic I do not believe its possible. There is no guarantee that the spouse will ever benefit from the insurance, because there is no guarantee which one of you will pass away first, and life insurance is not deductible in any ordinary way.

Other forms of insurance provide more immediate benefits and/or are required by law, (ie car insurance, medical insurance etc) and medical insurance is deductible in a more ordinary way as well.

Then I suggest that courts bent on ordering life insurance for the alimony receiver upon the payor's death; to order enough alimony so that the receiver can then purchase the life insurance themselves.

Wouldn't that be a more fair way to handle it?

Seems the payor has to do all the paying and in addition has to pay for their own death without a tax deduction for the benefit of the receiver.

Term life insurance doesn't get any cheaper as people age.

 

[mistoffolees]

What is the name of your state (only U.S. law)? New York

If you are court ordered to retain life insurance on yourself to satisfy an alimony judgement with ex as beneficiary in the event of your death, can you claim any part of the premium as an income tax deduction?

Yes, but with caveats:

Publication 17 (2010), Your Federal Income Tax
"Life insurance premiums. Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy."

If your spouse owns the policy, and IF you meet the other requirements (such as it not being described as child support or property division), then it should be deductible.

 

[Bali Hai]

Yes, but with caveats:

Publication 17 (2010), Your Federal Income Tax
"Life insurance premiums. Alimony includes premiums you must pay under your divorce or separation instrument for insurance on your life to the extent your spouse owns the policy."

If your spouse owns the policy, and IF you meet the other requirements (such as it not being described as child support or property division), then it should be deductible.

Judge screwed me again!

 

[tuffbrk]

You know, Bali, I hadn't thought of the life insurance. Interestingly enough, I was ordered to retain life insurance with wording that makes ex the beneficiary on behalf of the children...I didn't have to get another policy to ensure he receives an allotment to replace alimony in the event of my death.

I re-reviewed my paperwork after researching a number of alimony court cases and most of them included a life insurance requirement. Maybe my attorney actually did something correctly in my case?!! If I had to obtain that insurance, I'd be looking over my shoulder constantly!

If you work, you elect to pay for LTD or STD over and above state minimums just in case. Yet if you receive alimony, it is not your responsibility to "elect" to pay for the insurance to cover you just in case...seems lopsided. But I really wouldn't want my ex to be taking a life insurance policy on me without my knowledge!! Don't know that there is a good answer to this issue.

 

[Zigner]

Judge screwed me again!

No, it is clear that your ignorance has screwed you. You just want to shift the blame...

 

[TinkerBelleLuvr]

You know, Bali, I hadn't thought of the life insurance. Interestingly enough, I was ordered to retain life insurance with wording that makes ex the beneficiary on behalf of the children...I didn't have to get another policy to ensure he receives an allotment to replace alimony in the event of my death.

I re-reviewed my paperwork after researching a number of alimony court cases and most of them included a life insurance requirement. Maybe my attorney actually did something correctly in my case?!! If I had to obtain that insurance, I'd be looking over my shoulder constantly!

If you work, you elect to pay for LTD or STD over and above state minimums just in case. Yet if you receive alimony, it is not your responsibility to "elect" to pay for the insurance to cover you just in case...seems lopsided. But I really wouldn't want my ex to be taking a life insurance policy on me without my knowledge!! Don't know that there is a good answer to this issue.

Generally, when you get life insurance outside of the work related stuff, you have to get a physical. YOUR clue is when someone is wanting you to get tested, etc.

 

[Bali Hai]

No, it is clear that your ignorance has screwed you. You just want to shift the blame...

Judge orders life insurance, JUDGE should know what the hell they're doing and do it properly!

And you want to blame the victim? Take your blinders off.

 

[Zigner]

Judge orders life insurance, JUDGE should know what the hell they're doing and do it properly.

There was nothing improper done. It just wasn't to your liking. That doesn't make you a "victim".

I'll tell you what, I'll stop. You are so blinded by your hatred for women and "the system" that you can't see reality. Good day.

 

[tuffbrk]

I root for ya Bali but I'm "iffy" on this. Reality is that judges are trained in law. Certainly they receive exposure to any number of topics besides the law, but their training is law. It was really up to your attorney to protect you. Of course, your attorney was trained in law as well.

This is why I keep writing to my legislators and copy finance professional groups/CPAs that there needs to be a mandate to include Finance/tax professionals in divorce decisions/recommendations.

After all, when it concerns custody you have custody mediators. Folks that are trained in their field. We really need to have mandated economic mediators in the process that are true tax professionals. Not just another attorney who is charged with keeping folks "reasonable" when it comes to figuring out the money end. (as I learned about the economic mediator the court appointed in my case.)

For example, my attorney actually has it written in my decree that I can claim HOH for the calendar year preceding my divorce. However, I was forced to allow my ex to remain in the home for a month after my divorce. Thus, claiming HOH the year prior was absolutely against IRS rules. If I had done so, I could have been charged penalties and interest on any unpaid tax obligation. I would have been held accountable by the IRS with no recourse back to my attorney.

We need to leave the law to the lawyers and the rest really needs to be guided by the appropriate experts.

Write, write, write to your legislators....

 

[tuffbrk]

There was nothing improper done. It just wasn't to your liking. That doesn't make you a "victim".

Not so fast Zigner. Ordering a party to maintain life insurance to ensure a monetary award to an ex-spouse that extends after death is not necessarily proper. In fact, since the payor is not given any type of consideration financially - tax break or included as an alimony payment - it is nothing more than another financial burden that I can say with confidence was NOT taken into consideration when the amount of alimony was awarded. After all, in the case of a long term marriage and lifetime alimony, the payee will now be able to collect social security. Thus, why should the payor have to pay a premium in order to "guarantee" the funds are available after their own death?

It is a little lopsided.

 

[Bali Hai]

Not so fast Zigner. Ordering a party to maintain life insurance to ensure a monetary award to an ex-spouse that extends after death is not necessarily proper. In fact, since the payor is not given any type of consideration financially - tax break or included as an alimony payment - it is nothing more than another financial burden that I can say with confidence was NOT taken into consideration when the amount of alimony was awarded. After all, in the case of a long term marriage and lifetime alimony, the payee will now be able to collect social security. Thus, why should the payor have to pay a premium in order to "guarantee" the funds are available after their own death?

It is a little lopsided.

Get'em tuffbrk!

 

[mistoffolees]

Not so fast Zigner. Ordering a party to maintain life insurance to ensure a monetary award to an ex-spouse that extends after death is not necessarily proper. In fact, since the payor is not given any type of consideration financially - tax break or included as an alimony payment - it is nothing more than another financial burden that I can say with confidence was NOT taken into consideration when the amount of alimony was awarded. After all, in the case of a long term marriage and lifetime alimony, the payee will now be able to collect social security. Thus, why should the payor have to pay a premium in order to "guarantee" the funds are available after their own death?

It is a little lopsided.

Says who?

The fact is that the payor has a legal obligation to pay a certain amount of alimony. There's nothing wrong with requiring a guarantee that the alimony will be paid - whether they're around to see it or not.

Now, I think it's pretty universally agreed that lifetime alimony is a problem and should be used only rarely, if ever. But in the overwhelming majority of alimony cases, there is a fixed amount due for a fixed time. What is wrong with guaranteeing that the recipient will get that?

 

[tuffbrk]

There is nothing wrong with that but at whose expense? And was that expense taken into account when the amount of alimony was determined? If I'm working I can elect to take add'l STD or LTD. Similarly, the payee should have the ability to elect to take insurance.

Why in the world should the payor be obligated to pay for it?! And if you are going to order that a party be obligated to pay for a product that they don't want to purchase, the least that can be done is to count it towards alimony or provide a tax credit to the payor.