Life Insurance Policies and Guaranteed Maintenance, Part 3

guaranteed maintenance, Illinois divorce lawyerSometimes a life insurance policy may be the most valuable asset in an Illinois divorce.

A life insurance policy may be used to guarantee maintenance paid to a spouse as the result of a divorce.  If a husband dies, his surviving, former spouse will receive his life insurance proceeds as payment of his maintenance obligation.

In Illinois, what can I do in my divorce if my soon-to-be ex-husband is ordered to pay me maintenance, but he refuses to make me beneficiary of a life insurance  policy on his life to guarantee my maintenance?

The answer: You ask a judge to order him to maintain a current policy of life insurance on his life, sufficient to guarantee your maintenance payments. Or, if he does not have such a policy, he must obtain one. The only kicker is that if he does not have existing life insurance you may be the one paying the premiums.

Prior to January 2012, the law in Illinois was conflicting in regards to whether or not Illinois divorce judges had the authority or power to order a maintenance paying spouse to take out a life insurance policy on his or her life to ensure those maintenance payments were made.

Finally, effective January 1, 2012, our Illinois State Legislature created Public Act 097-0608, amending four sections of the Illinois Marriage and Dissolution of Marriage Act (“IMDMA”). This granted an Illinois divorce judge the power to require a party to obtain or maintain life insurance to secure an award of maintenance. (750 ILCS 5\504 (f))

The new law recognized two situations where a husband, ordered to pay maintenance, could be court ordered to maintain life insurance to ensure maintenance payments were made to his wife.

In the first situation where a husband has existing life insurance, the new law provides that an Illinois divorce judge may "allocate death benefits,” have the "the right to assign death benefits” or “the obligation for future premium payments between the parties … " (750 ILCS 5\504 (f)) Therefore it is possible that a wife may have to contribute toward the premium payments. However, if a husband makes significantly more than a wife, it is unlikely that she would have to contribute.

In the second situation where a husband has little or no existing life insurance on his life at the time of the divorce, the new law provides that an Illinois divorce judge may order a new life insurance policy to be obtained to secure maintenance. However, if a judge orders a new life insurance policy, the husband only has to cooperate for the wife to obtain the policy of life insurance; the wife would be responsible for the payment of the premiums.

In practice, however, Illinois divorce judges routinely order husbands to pay the premiums on life insurance policies more often than not—particularly when a husband earns substantially more than his soon-to-be ex-wife. Likewise, Illinois divorce judges have the power to add additional amounts of premium payments in the maintenance payments so that an ex-wife has sufficient funds to pay the premiums. This can be successfully won by the wife's attorney.

As you can see, even the simple provision, like a life insurance provision in the marital settlement agreement to guarantee maintenance, is not simple. Hence, this is why our attorneys at Martoccio & Martoccio are highly skilled and experienced in dealing with all of the provisions of marital settlement agreements in order to get the best possible deal for you.

Need to Speak with an Attorney? Contact the Law Office of Martoccio & Martoccio Today

If you are considering filing for divorce, please contact the experienced Illinois divorce attorneys at the Law Office of Martoccio & Martoccio. We are here to advise you and look out for your best interests. Call us today at 630-920-8855 to schedule your free consultation. We have offices located in DuPage County, Cook County, Kane County, Will County and Kendall County.

<< Read Part 2 of the Series, Read Part 4 of the Series >>

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