In our previous installment of this two part series, we talked about how divorce will seriously impact your insurance coverage. We also looked at the first two items on the list that you need to address, namely your homeowner’s insurance and your health insurance.
Yes, we know, this is an overwhelming time in life and you already have a ton of other things to do. But not taking care of these very important issues can lead to a lot of financial complications and problems down the road (which is the last thing you need while you’re trying to get back on your feet after a divorce!) So, moving forward…
Car Insurance:
Most married couples in Michigan own more than one car. In these cases, usually both spouses are named on the auto insurance policy. But having your name removed from a car insurance policy is a little more complex than you may expect.
Car insurance companies require that any time one person is removed from a policy, they must have the permission of both parties. This is to ensure that someone cannot be removed from a policy without their knowledge. This will require a divorcing couple to come to an agreement together about their car insurance policy, before they make any drastic changes to their automobile insurance policy.
One of the first steps for many couples is getting separate living addresses. Incidentally, this is also the first step towards separating liability. For a couple who are still legally married and living at the same address, liability might be shared. So as soon as you move out, it makes sense to consider having separate addresses listed with your insurance company on separate insurance policies.
Life Insurance:
The purpose of life insurance is to ensure that your loved ones will not suffer undue financial difficulties once you pass away. However, divorce usually changes a person’s status from “loved one” to “former loved one.” That means that the policy may need to change to reflect that.
In Michigan, the life insurance policy designation of a beneficiary, is actually included in a divorce judgment. This means that it is a part of your final court order (Judgment of Divorce) that your spouse will not be the beneficiary of any of your life insurance. If for some reason you want your (former) spouse to remain as your beneficiary, you must re-designate them as the beneficiary after your are legally divorced.
If however, your life insurance policy is to be used to fund child support or spousal support (also called alimony) after the divorce is finalized and in the event of your demise, your attorney can draft a very specific provision into the final divorce decree to accomplish that goal. If you have children and your ex relies on your child support payments for cost of living, deleting them as beneficiary might leave them, and your children, in major financial distress, should you pass away unexpectedly.
Handling your insurance policies, both during and after a divorce, can be stressful. In addition, you may be unsure of what is the right course of action or what the law requires of you. Talk to your family law attorney at The Kronzek Firm. We are familiar with all of the intricacies of the law, and can advise you on what the right course of action will be in your specific case. We can be reached at 1 800-576-6035.
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