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How Life Insurance Works With Divorce

Protecting Alimony & Child Support Part 2

If you have custody of the kids, the most prudent way to insulate yourself from the situation in the previous part is to maintain a life insurance policy on your ex-spouse with a benefit amount high enough to replace your child support or alimony income at least until the last child leaves for college. As the custodial parent, if your ex is irresponsible or untrustworthy, you may want to own the policy and pay the premium yourself since life insurance becomes null and void if the payments lapse.

Another plus side to the recipient owning the life insurance policy is that the payor spouse cannot change the beneficiary designations. In this case, the payor would be insured under the plan, but the receiving ex-spouse would be listed as an owner. This does not mean that the receiving ex-spouse has to pay the premium.

The insurance trust attorneys at Taroff & Taitz, LLP recognize your need to keep the funds from your life insurance policy out of your taxable estate. This can be done by funneling those funds into an insurance trust. Our team of highly experienced insurance trust attorneys is uniquely qualified in the area of insurance trust administration and the setting up of insurance trusts. Our mission is to preserve the legacy you have created while ensuring that your loved ones are taken care of after the one insured under the policy passes. Contact Taroff & Taitz, LLP to secure the future for the ones you love.

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