Ex Spouse's right to Life Insurance

[speklbellybeagl]

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

This is in reference to my brother's divorce. My Dad purchased a life insurance policy on my brother when he was an infant - for something like $50k. He eventually transferred it to my brother and had never put my brother's wife's name on it as a beneficiary - which apparently has bothered her. Now my brother is in the process of getting the divorce and his (x) wife now demands that she be a beneficiary on this policy. Apparently my brother's attorney states that he can do nothing about this and she get's her way. How can this be legal? Why wouldn't it just be put in thier son's names? Couldn't he just cancel the policy and do away with it before the divorce is final?

 

[Ohiogal]

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

This is in reference to my brother's divorce. My Dad purchased a life insurance policy on my brother when he was an infant - for something like $50k. He eventually transferred it to my brother and had never put my brother's wife's name on it as a beneficiary - which apparently has bothered her. Now my brother is in the process of getting the divorce and his (x) wife now demands that she be a beneficiary on this policy. Apparently my brother's attorney states that he can do nothing about this and she get's her way. How can this be legal? Why wouldn't it just be put in thier son's names? Couldn't he just cancel the policy and do away with it before the divorce is final?

They have a child and if he dies she still has to support the child until the child is an adult. If he tries to cancel the policy he will find himself in trouble with the court -- he will also find that he will have to provide her with another policy most likely equal to that one and it will cost even more.

 

[LdiJ]

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

This is in reference to my brother's divorce. My Dad purchased a life insurance policy on my brother when he was an infant - for something like $50k. He eventually transferred it to my brother and had never put my brother's wife's name on it as a beneficiary - which apparently has bothered her. Now my brother is in the process of getting the divorce and his (x) wife now demands that she be a beneficiary on this policy. Apparently my brother's attorney states that he can do nothing about this and she get's her way. How can this be legal? Why wouldn't it just be put in thier son's names? Couldn't he just cancel the policy and do away with it before the divorce is final?

The attorney's response makes no sense to me. If is considered an asset its a premarital one. While its good for there to be life insurance available to assist in supporting the children should something happen to your brother, I don't understand why the attorney is telling him that he is obligated to put her name on it.

 

[Ohiogal]

The attorney's response makes no sense to me. If is considered an asset its a premarital one. While its good for there to be life insurance available to assist in supporting the children should something happen to your brother, I don't understand why the attorney is telling him that he is obligated to put her name on it.

A court will ORDER that he make her a beneficiary to life insurance. It may not be THIS particular policy but it will be AN INSURANCE POLICY on his life until the children reach the age of majority and are no longer receiving child support. He can ask for the same thing on her. The cheapest method would be changing the beneficiary on THIS policy to being her rather than purchasing ANOTHER policy.

 

[mistoffolees]

A court will ORDER that he make her a beneficiary to life insurance. It may not be THIS particular policy but it will be AN INSURANCE POLICY on his life until the children reach the age of majority and are no longer receiving child support. He can ask for the same thing on her. The cheapest method would be changing the beneficiary on THIS policy to being her rather than purchasing ANOTHER policy.

Right. Technically, the wife has no rights to this policy. However, she does have the right to ask the court to ensure that the husband will support his child. Requiring a given amount of life insurance is command and prudent.

While it is true that the court doesn't care whether he signs THIS policy over or gets a new one, they do have an interest in ensuring the child's support. The easiest and cheapest way is to just use the existing policy.

 

[LdiJ]

A court will ORDER that he make her a beneficiary to life insurance. It may not be THIS particular policy but it will be AN INSURANCE POLICY on his life until the children reach the age of majority and are no longer receiving child support. He can ask for the same thing on her. The cheapest method would be changing the beneficiary on THIS policy to being her rather than purchasing ANOTHER policy.

It seems to me that it has been argued on these forums in the past that a court cannot compel a parent to provide life insurance. I absolutely believe that a parent should do so if its affordable, but I thought that we had come to the conclusion that it could not be compelled. Part of that arguement included the fact that the children would get SS survivors benefits.

However, my real question is why does SHE have to be the beneficiary? Why cannot the children be the beneficiaries? If she is the beneficary, she can use the money how she sees fit, even if it does not benefit the children. If the children are the beneficiaries, then she has a fiduciary obligation to manage the money in whatever way is in the children's best interest.

 

[Ohiogal]

It seems to me that it has been argued on these forums in the past that a court cannot compel a parent to provide life insurance. I absolutely believe that a parent should do so if its affordable, but I thought that we had come to the conclusion that it could not be compelled. Part of that arguement included the fact that the children would get SS survivors benefits.

However, my real question is why does SHE have to be the beneficiary? Why cannot the children be the beneficiaries? If she is the beneficary, she can use the money how she sees fit, even if it does not benefit the children. If the children are the beneficiaries, then she has a fiduciary obligation to manage the money in whatever way is in the children's best interest.

Because it replaces CHILD SUPPORT. And child support can be used how she sees fit. Whether it benefits the children or not.

 

[mistoffolees]

Because it replaces CHILD SUPPORT. And child support can be used how she sees fit. Whether it benefits the children or not.

That's true and the court would probably order it that way.

However, Ldij makes a good point. It would probably be worth at least proposing that it be in the kids' names - and see if stbx is OK with that.

Of course, in the end, it doesn't really matter much. If she's going to misuse the money if it's in her name, she can almost as easily misuse the money if it's in the kids' names. The only real way around that is to have the insurance beneficiary be a trust with someone he trusts as trustee. The court MIGHT allow that as an alternative to child support, but, then again, they might not.

 

[Bali Hai]

That's true and the court would probably order it that way.

However, Ldij makes a good point. It would probably be worth at least proposing that it be in the kids' names - and see if stbx is OK with that.

Of course, in the end, it doesn't really matter much. If she's going to misuse the money if it's in her name, she can almost as easily misuse the money if it's in the kids' names. The only real way around that is to have the insurance beneficiary be a trust with someone he trusts as trustee. The court MIGHT allow that as an alternative to child support, but, then again, they might not.

The problem here of course is giving the court the authority to order people around when the private lives and individual choices of people are none of the courts business.

Last I knew this was a free country. That means freedom of choice whether the choice is widely accepted or not.

I would like to see the outcome of a couple who were NOT involved in a divorce action, but one spouse took the other to court and asked the judge to ORDER her husband how much life insurance to buy and to ORDER that she be made the irrevocable beneficiary on that policy.

When my kids were very young I didn't have the means to buy life insurance. And when I say I didn't have the means, it was decided by ME whether I had the means and not some government official sticking their nose in MY business.

So why don't we just enact laws that make life insurance mandatory and make it mandatory WHO the beneficary will be??

 

[LdiJ]

Because it replaces CHILD SUPPORT. And child support can be used how she sees fit. Whether it benefits the children or not.

But Social Security Survivor's benefits replace child support. Therefore how can someone be compelled (outside of an agreement) to provide life insurance with the ex as beneficiary?

Don't get me wrong, I think that parents should provide life insurance if its affordable...and the younger you are, the more affordable it is.

However, I have never seen any kind of law anywhere that states that a parent can be compelled to provide life insurance.

 

[Ronin]

The question of whether or not I was 'willing' to make my ex a life insurance beneficiary (to cover child support) came up during a divorce trial, and I responded Yes. However, it never made its way to the decree, so the question was moot.

In hindsight I would have said No to the life insurance question, simply because my social security statement indicates that it will pay more in survivor benefits than my current child support. So if this question comes up, one should review their yearly social security statement. It all depends upon lifetime earnings.

Any responsible parent should ensure they have some life insurance as a gap filler if social security is less than child support. And even more insurance if they have concerns about how their childrens college and other life events will be funded.

However the beneficiary of such a policy certainly does not have to be the ex, or the children, but rather any trusted adult on behalf of the children.

 

[speklbellybeagl]

He can ask for the same thing on her. The cheapest method would be changing the beneficiary on THIS policy to being her rather than purchasing ANOTHER policy.

As he felt it was like having a 'price on his life', he did infact ask that she also get a policy on herself and make him the beneficiary -- her lawyer's response: "Yes, but it will cost you". Basically he would be paying for his and hers.

 

[Bali Hai]

As he felt it was like having a 'price on his life', he did infact ask that she also get a policy on herself and make him the beneficiary -- her lawyer's response: "Yes, but it will cost you". Basically he would be paying for his and hers.

Well that fits right in with the money he's paying his lawyer to represent HER!!

The life insurance only became an issue because court officials got involved and want to run his life.

 

[mistoffolees]

Well that fits right in with the money he's paying his lawyer to represent HER!!

The life insurance only became an issue because court officials got involved and want to run his life.

Or, for the more rational people out there, because the court wants to ensure that the children are not abandoned without support in the even one of the parents dies. That is a perfectly reasonable objective for the court.

 

[Bali Hai]

Or, for the more rational people out there, because the court wants to ensure that the children are not abandoned without support in the even one of the parents dies. That is a perfectly reasonable objective for the court.

Suggesting that I'm irrational doesn't mean much coming from a numb skull.

Why doesn't the court order ALL married people with children to get life insurance then knucklehead??