Spousal Support Can Be Secured With A Life Insurance Policy
In today’s world, it is not uncommon for married spouses to take out life insurance policies on one another. Of course, if you’re happily married, you hope and pray that you’ll never be in the place of having to cash one in. Nevertheless, such policies provide some “peace of mind” that should the unthinkable happen, the financial burden caused by such a tragedy may be a little easier to bear.
So, having a life insurance policy on your spouse makes sense, right? But what about having a life insurance policy on your ex, or soon-to-be ex-spouse? Can and should a divorce court allow this?
Many people would argue that in divorce cases where child support or spousal support is ordered, it is smart to have a life insurance policy in place on the parent who is obligated to pay. By doing so, it ensures that the children or receiving spouse will be supported even if the other spouse dies.
Therefore, it is fairly common for a spouse who wants to guarantee support, to request that their soon-to-be ex-spouse carry a policy naming them as the beneficiary.
Life insurance policies guaranteeing child support are generally only ordered until the child reaches the age of majority. Similarly, policies guaranteeing spousal support are typically only valid until the support obligation is paid.
Even though life insurance policies to guarantee spousal support are not a new concept for Ohio courts, case law shows that certain requirements must be met for these policies to be upheld.
Ohio Revised Code Section 3105.18(B) states that an order for spousal support shall terminate upon the death of either party, unless the order expressly provides otherwise. Due to this provision, Ohio courts have struggled with the interplay between an order for spousal support, and a requirement to carry a life-insurance policy to guarantee such support.
Should A Life Insurance Policy Still Be In Place To Ensure Spousal Support Even After It Has Stopped?
When both provisions are in place, the question becomes: if spousal support ends when either party dies, why should a life insurance policy still be in place to ensure support even after it has stopped??
For example, in Waller v. Waller, the 7th District Court of Appeals was faced with a situation in which a 64-year-old husband was ordered to pay spousal support for 10 years, and to carry a life insurance policy for the benefit of his ex-wife until the 10 years ended. 2005-Ohio-4891. The problem in Waller was that the trial court stated that spousal support would terminate upon husband’s death, but also required him to maintain a life insurance policy for 10 years. But what would happen if he died before the 10 years were up?
According to the court order, the spousal support would stop, but the life insurance policy must be maintained for the full 10 years. Because of this inconsistency, the appeals court ultimately sent the case back to the trial court so that it could clarify its intent. However, in its decision, the court noted that Ohio appellate courts seemed to be of the consensus that spousal support can be secured with a life insurance policy, but only if the court complies with R.C. 3105.18(B) by expressly stating that spousal support is to extend beyond the death of either party.
Spousal Support Shall Continue After Death
In more recent years, Ohio courts have taken it one step further and held that if this specific language is not present in such cases, the life insurance provision must be vacated. See for example, Marron v. Marron, 2014-Ohio-2121. The court in Marron explained that requiring spousal support to end when either party dies, while also securing the support by a life insurance policy is both “unreasonable and inappropriate,” unless it expressly provides that spousal support shall continue after death.
Spousal Support Questions? Discuss Your Life Insurance Policy Case With Us Today!
So, having a life insurance policy on your ex-spouse may not be as ridiculous as it sounds. While Ohio case law only seems to deal with situations in which the court orders the paying spouse to take out the policy on themselves, it would seem that a court would similarly allow the spouse on the receiving end to take out and pay for a policy on their ex to ensure they are covered. If a court doesn’t order the obligated spouse to carry life insurance to guarantee support payments and their ex is willing to pay for it themselves, why not? However, if the other spouse refuses to cooperate with the medical screening and paperwork portion of taking out the policy, it may be necessary to seek court intervention.
No matter what side of the coin you are on, it is important to make sure you discuss your life insurance policy case with a knowledgeable family law attorney. As the spousal support cases above have shown, leaving even one sentence out of your divorce documents could invalidate everything you are trying to accomplish. Don’t go it alone! Contact one of our knowledgeable family law attorneys today by using this link.
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Robert L. Mues
Robert Mues is the managing partner of Dayton, Ohio, law firm, Holzfaster, Cecil, McKnight & Mues, and has received the highest rating from the Martindale-Hubbell Peer Review for Ethical Standards and Legal Ability. Mr. Mues is also a founding member of the "International Academy of Attorneys for Divorce over 50" blog.