DON’T LET THAT COURT ORDERED LIFE INSURANCE POLICY LAPSE AS IT COULD LEAD TO A WINDFALL FOR THE EX-SPOUSE BENEFICIARY!
DIVORCE LAWYER, NASSAU COUNTY NY
H. Michael Stern, Esq., a New York divorce and family law attorney with over 33 years of experience suggests that a party ordered to maintain life insurance should not permit the life insurance policy to lapse as the Court can impose severe financial penalties to the formerly insured party in favor of the ex-spouse beneficiary.
In a recent case determined by the Appellate Division of the Supreme Court, Third Judicial Department, the Court faced a situation where the trial Court had directed the husband to maintain life insurance for the wife. Prior to the divorce judgment, the policies lapsed. The husband was well into his seventies and the wife maintained that it was highly unlikely that he was insurable.
The Appellate Court modified the judgment directing the husband to pay the wife the total cost of the remaining premiums on the policy AND the cash value of the policy at the time of the lapse. This resulted in an order to pay the ex-spouse beneficiary over $126,000 within 90 days of the decision of the Court. Accordingly, every effort should be made to prevent the lapse of a life insurance policy which is the subject of a Court order as the Court has the option of resorting to a drastic financial remedy similar to the case mentioned in this blog.
While it should be noted that the insured spouse in the subject case was of advanced age, this remedy may not be available if a new substituted policy of life insurance is obtained by the party ordered to maintain the policy following the lapse. However, the issue of whether a party is uninsurable or not appears to be a critical factual issue if a request for monetary compensation is made. Moreover, the issue of the value of the life insurance to be maintained following the divorce appears to be a substantial issue for trial, if a parties medical history renders that party uninsurable or, the policy premiums are likely to become unaffordable over time.
I have been trying divorce cases for over 33 years. Focusing on the needs of the client and the results sought have always been a hallmark of my Long Island practice over three decades.
Feel free to contact me, H. Michael Stern, Esq. a Long Island divorce and family law attorney, if you are interested in a free consultation to discuss your matrimonial, divorce or family law matter by phone at 516-747-2290.
My Long Island office is conveniently located adjacent to the Roosevelt Field Mall ring road at 666 Old Country Road in Garden City, New York.
Written by, H. Michael Stern, Divorce Lawyer Long Island NY