Insights from a Charleston Divorce Lawyer
Life insurance often becomes a contentious issue in Charleston divorce cases. Many couples debate who should remain the beneficiary of existing policies, especially when these policies are meant to secure financial obligations like child support, alimony, or future educational expenses.
As a seasoned Charleston divorce lawyer, I often address questions about the fate of life insurance after divorce. This article delves into the crucial aspects of managing life insurance policies during and after your divorce in Charleston .
Life Insurance Doesn’t Automatically Update After a Divorce
Many people mistakenly believe that a Charleston divorce decree automatically updates the beneficiary designations on a life insurance policy.
The truth is that, if you don’t contact your insurance company to change your beneficiary, your ex-spouse will still benefit from your policy after your divorce. I advise my divorce clients to promptly update their life insurance to designate a new beneficiary such as a child, a trust, or another appropriate party.
If your ex-spouse is obligated to pay you child support or alimony, you should ask the Family Court to order your ex-spouse to keep you as the beneficiary of a large life insurance policy. The life insurance can offset your loss of alimony and child support if your ex-spouse dies.
Understanding Life Insurance in a Charleston Divorce
Life insurance is vital for many divorcing couples – especially those with young children or significant financial obligations extending post-divorce. Charleston divorces require careful consideration of the two primary types of life insurance:
- Permanent Life Insurance: This type of insurance includes a death benefit and a savings component, which accumulates cash value over time. It’s considered a marital asset and can be divided as part of the property settlement in a divorce. This type of policy is particularly significant in long-term marriages, especially for couples over 50.
- Term Life Insurance: Unlike permanent life insurance, term life insurance provides coverage for a set period and does not accumulate cash value. Consequently, in a divorce, term life insurance is not treated as a marital asset in the property division. While term life is not divisible in Family Court, term life insurance can guaranty that child support and alimony will be paid, even if the ex-spouse dies.
Customizing Life Insurance Decisions in a Charleston Divorce
Every divorce is unique, and the approach to handling life insurance should be tailored to meet the specific financial and familial needs of those involved. In some cases, maintaining life insurance on an ex-spouse makes sense, particularly if there are ongoing financial commitments. However, there may be situations where it’s advisable to cancel the policy or change the beneficiary.
Charleston Divorce Mediation – An Alternative to a Divorce Court Fight
Divorce mediation offers a less adversarial approach to resolving divorce issues like life insurance, child custody, and property division. Mediation is more affordable, less stressful, and much faster than a fight in divorce court.
As a Charleston divorce attorney and certified family court mediator, I recommend mediation as a cost-effective, private, and less stressful alternative to traditional divorce litigation. Mediation allows both parties to negotiate a settlement that best meets their needs.
Consult a Charleston Divorce Lawyer Today
Navigating the complexities of life insurance in a divorce can be challenging. I leverage my extensive experience as a divorce attorney to guide our clients through the divorce process, ensuring they make informed decisions that benefit their future and that of their family.
If you’re facing a divorce in Charleston and have questions about how it will impact your life insurance or any other aspect of your divorce, please contact me for a free confidential phone consultation at 843-279-8480. I am here to provide the support and guidance you need to manage your divorce effectively and efficiently. I serve clients in Berkeley, Charleston, and Dorchester Counties.
About Kenneth Peck
Kenneth Peck is a certified Charleston Family Court Mediator with more than 40 years of experience as a divorce attorney. He uses his knowledge and experience to guide couples in negotiating divorce settlements so they can save money, complete the divorce process quicker, and get better outcomes than they would at trial.