High asset divorce cases require diligence and a team of experts to help you along the way. Many of these divorces include millions or billions in assets. Acting irrational during a divorce of this magnitude is rather common, and emotions can often lead to financial errors that will lead to severe consequences when it comes time for a settlement calculation. Both parties must divulge all of their assets.
Life Insurance in High Asset Divorces
One asset that is often overlooked is a life insurance policy. These policies can have payouts of millions of dollars in some circumstances, and a lot of people don’t view these policies as an asset. In fact, many people view life insurance as they do home insurance – as a protective insurance and not an asset. You pay into life insurance, and there can be hidden wealth in these policies.
Spouses often do not realize how much money has accumulated in their life insurance policies. Even though a spouse isn’t trying to be misleading, life insurance never becomes a topic of discussion because no one wants to speak of the other’s demise.
Insurance reviews are meant to help overcome some of these issues and will be part of a divorce’s financial analysis. Life insurance may be analyzed, but it is a difficult to determine the true value of the asset.
Decoupling of a life insurance policy can occur, and oftentimes, a life insurance policy is part of a trust, which complicates matters even more. A prominent attorney will be able to help you unravel these policies so that they are in the best interest of both parties. In less complex cases, all that needs to be done is for the beneficiary of the policy to be changed so that your current spouse does not retain beneficiary rights even if you remarry in the future.
Whole life insurance policies are the most common among high asset divorces. These policies are viewed as investments and will continue to grow in value. These cash values can be substantial, and the values need to be part of all asset disclosure, as this cash can be accessed even without death occurring.
Policies may have existed prior to your marriage, which complicates matters even further. The premiums paid before getting married will likely be non-martial, meaning that you would receive all of the money accumulated in your policy before marriage. The remaining would be martial property that may be divided in accordance with your divorce agreement.
The Micklin Law Group, LLC is a New Jersey law firm specializing in family law and estates. Attorney Brad Micklin was recently named to The National Advocates list of Top 100 attorneys from each state. To set up a consultation, call 973-562-0100.