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Life Insurance Credit: ssguy / Shutterstock.com

“Death ends a life, not a relationship.” This quote, from Mitch Albom was certainly not meant in the context of a divorce, but it does apply, particularly when child support and/or alimony are a component of a divorce settlement or court ordered obligation. To ensure that the financial relationship of paying alimony and/or child support will survive the premature death of the supporting parent or spouse, those payments are often secured with a life insurance policy. This is where matrimonial law and estate planning intersect and require some careful consideration on the part of parents, spouses and lawyers.

In New Jersey, a parent obligated to pay child support and/or a spouse obligated to pay alimony is generally required to maintain life insurance as security for the future payment of these obligations in the event of his or her premature death. The general concept is easy enough for most parents, who likely had life insurance in place prior to the divorce for the exact same reason: the future financial security of their children. For the spouse paying alimony, the idea of maintaining life insurance so your former spouse continues to receive support beyond your death is less palatable. Nevertheless, our courts generally require this security for future alimony payments. However, under either scenario, there are a number of estate planning issues which must be considered in negotiating and drafting your divorce agreement.

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