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Life and health insurance in a divorce

| May 8, 2019 | High-Asset Divorce, High-Asset Divorce |

Arizona couples who are getting a divorce should make sure they do not neglect insurance issues. First, if one person is covered under the other person’s employer-sponsored health insurance, it might be necessary to seek a new plan. While it is possible to extend coverage on the employer’s plan through COBRA for up to three years, this may be the most expensive option. The person playing the premium has to pay the employer’s share as well as an administrative fee. Furthermore, this is still a temporary solution at best.

Life insurance is another important consideration if one party will be paying alimony to the other. The divorce settlement may include a requirement for a life insurance policy on the payer. This can protect the recipient if the payer dies. If the recipient owns the policy and makes the premium payments, that can ensure that the policy does not lapse.

Arrangements for life insurance should be made before the divorce agreement is finalized in case the payer is uninsurable. This allows for the opportunity to modify the agreement if necessary.

A high-asset divorce may include a number of other complex elements. For example, one or both spouses may own a business. Under Arizona’s community property law, each spouse is entitled to an equal share of the business along with other marital assets. If the owner had the business before the marriage, the spouse could still be entitled to half of its appreciation value. One spouse may need to buy out the other. Wealthy couples may have jewelry, antiques, or other valuable collections that must be appraised and either sold or divided. The couple might be able to negotiate an agreement with the help of their respective attorneys that does not necessarily involve dividing every asset equally.