When our Maryland readers think about complex property division, they probably envision huge amounts of marital property that is subject to a split, along with numerous bank accounts, the complex valuation of artwork or vicious fights over assets that have sentimental value to both spouses. However, one difficult part of the property division process often gets overlooked: splitting insurance.
An insurance split doesn’t necessarily mean the same thing as the rest of the asset division process. It means that, going forward, one spouse may need to find new coverage for health insurance or disability insurance, while the other spouse actually might get the luxury of paying lower rates because the coverage plan goes from couple or family to single. A recent article noted some of the problems in a post-divorce insurance regime, and our readers may start thinking of this area of divorce as one of the more important to discuss.
The article noted that life insurance, car insurance and home insurance, among other policies, will all likely need to be reviewed, updated or flat-out scrapped in the wake of a divorce. Beneficiaries may need to be changed on a life insurance policy, or getting a policy to begin with may be necessary to ensure that children are financially secure in the event of an untimely death of a parent who is ordered to pay child support.
Health insurance is a big concern. And, with all of the changes coming due to “Obamacare,” this area could get even murkier.
All in all, insurance policies need to be an important part of the divorce discussion, usually in tandem with property division negotiations. Overlooking this area of a couple’s life can lead to some big post-divorce headaches right after the legal proceedings are completed.
Source: Fox Business, “How to Uncouple Your Insurance in Divorce,” Michele Lerner, May 31, 2013