By Adam T. Kronfeld of Duff & Kronfeld, P.C. posted in Family Law on Friday, August 4, 2017.
When a party paying child support or spousal support dies, those payments end with the payor’s death. Thus, if you are receiving support, it is quite legitimate to consider what might happen if the payor dies before the term of support would otherwise naturally end. This may be especially important to consider where your children have special financial needs, or if you agreed to receive a greater amount of spousal or child support in lieu of other money or property. Alternatively, if you are paying child support and the other parent passes away, such that you become your child(ren) primary custodian, your living expenses could increase dramatically. Fortunately, Virginia law provides a “Plan B” to protect parties in those catastrophic circumstances.
It has long been the law of Virginia that the courts can require either parent to maintain a policy of insurance on their own life and to designate a child or children of the parties as beneficiary of some or all of the proceeds of such a policy. It is irrelevant which parent is the custodian of the child(ren) and who is paying the other child support. So long as the parties have a duty to support a child, the court can require either to keep a policy in place. The courts cannot require a parent to obtain a new policy of insurance that does not already exist at the time, but the parents themselves can agree to do so in a written agreement.
More recently, Virginia law has been amended to extend similar authority in cases involving spousal support. The courts can – but are not required to – order a party paying spousal support to keep in place an existing policy of life insurance and to assign some or all of the proceeds to the recipient spouse. The courts must consider a number of factors, including the ages and health of each spouse, the amount and duration of the spousal support award, the cost of the insurance policy, and the ability of each spouse to pay the insurance premiums. The courts can also allocate the cost of the insurance policy between the parties, meaning that both may have to pay some share of the cost, or either could be required to pay the entire cost. Additionally, outside of court, the parties always agree to their own terms for maintaining life insurance.
Virginia law offers opportunities to literally insure your receipt of child and spousal support, both in court and outside of court. You should be certain to discuss this contingency with your lawyer if either form of support is or may be an issue in your divorce or other family law matter.
If you would like to schedule a complimentary 30-minute consult, please call Duff Kronfeld & Marquardt P.C. at (703) 591-7475.