Nearly half of marriages end in divorce, and the financial fallout may be significant. Couples not only face the task of emotional separation but must also confront the financial aspects. In California, legal advice regarding alimony, child support and even life insurance is critical, especially if children are involved.
It is often suggested that keeping a life insurance policy on a former spouse may be a good idea. This is especially important when alimony and/or child support are involved. The loss of monthly income due to the death of an ex-spouse can be devastating. Studies show that more divorcing couples purchase or maintain existing life insurance policies on each other. Funds to pay the insurance premiums should be included in the divorce decree so that the spouse receiving support is protected.
Credit ratings can take a serious hit during a divorce. Dividing debt and the start-up expenses of starting over can be high. Change of residence may call for more or less property insurance coverage. If it is a rental property, consider personal property and liability insurance. Auto insurance premiums may fluctuate with the purchase of a new car, or by losing the multiple policy discounts.
It is typically recommended that credit reports be scrutinized during this time and that due diligence be exercised toward existing financial obligations. In California, the advice of an adept attorney who is well versed in the areas of divorce and alimony will likely prove helpful. A lawyer will be able to support and represent his or her client and formulate a plan for the best possible outcome.
Source: stillwatergazette.com, “Divorce and what happens next with insurance”, Jeff Zignego, Oct. 4, 2017