One of the most contentious issues during a divorce is the division of assets as there is a lot at stake. Couples often worry about how their assets will be divided between one another during property distribution. Understandably, divorce is a financially challenging process. During the division of assets, each spouse’s overall financial security is at risk as New York is an equitable distribution state. It is also common for couples to wonder whether life insurance may be subject to distribution during this process. If a divorce is imminent, it’s wise to contact a determined Rockland County Property Distribution Attorney who can help you protect your hard-earned assets during property distribution. In addition, keep reading to learn whether life insurance is divided in a divorce.
Is life insurance considered marital property in a divorce?
Firstly, life insurance is a contract an individual can obtain from an insurance company that promises to pay a certain amount of money to designated beneficiaries if the individual dies. Many couples tend to get joint life policies to ensure their children are provided for after they’ve departed. Among the many things that have to be sorted out in a divorce, life insurance is often neglected. It is important to understand how life insurance will be affected by a divorce as it can negatively affect your financial interests.
As mentioned above New York is an equitable distribution state. This means any assets acquired during the marriage that are considered marital assets are divided fairly, but not necessarily in an equal 50/50 split. With that being said, one spouse could be granted a larger share of marital assets if the court deems it reasonable. In some cases, this can lead to an unfavorable divorce settlement. When it comes to life insurance, every state is different in terms of considering it marital or separate property. Typically, life insurance will be brought up during negotiations. For the most part, life insurance that was obtained during the marriage is considered marital property. However, this can also depend on what type of policy you have. If you have term life insurance, which covers a temporary financial need, this type of policy is often considered separate property. It is important to note that in some cases the cash value of a life insurance policy may cause it to be considered joint assets. Ultimately, couples should not overlook life insurance when sorting out divorce issues.
For more information on how life insurance is handled in a divorce, please contact one of our proficient and dedicated attorneys. Our firm is committed to helping our clients navigate the intricacies associated with this legal process. Allow our firm to offer your individualized legal counseling today!
