By: Thomas Law Group On: October 19, 2016 In: Domestic Relations Comments: 0

If child support is to be paid by one parent to the other, pursuant to a Shared Parenting Plan, it is important to consider including language in the Shared Parenting Plan that provides life insurance coverage, in some cases on both parents, for the benefit of the children. Divorcing parents should be aware that if the parent paying child support dies, his/her obligation to pay support automatically terminates, and his/her estate is not obligated to continue to pay any child support. Without this child support, the surviving parent is often left with fewer financial resources to provide for the children, which in turn may lead to financial troubles.

Life insurance can help protect against this unfortunate situation. The goal of obtaining this coverage is to protect against the untimely, and usually unexpected, death of the parent paying the child support. It is not meant to be a windfall to the surviving parent, but should allow the parent receiving child support to continue to financially provide for the children once the child support terminates due to other parent’s death.

When including language regarding life insurance coverage there are several issues that should be considered and worked out by the parents. Some common examples are: 1) who will own the life insurance policy (i.e. who has control over the policy); 2) who pays for the cost of the policy; 3) does the death benefit of the life insurance policy reduce over time as the children get older and reach emancipation (when child support would terminate); 4) is the life insurance paid to the other parent in his or her name or is it paid into a trust for the benefit of the children.

Including language regarding life insurance should at the very least be considered by the parties and is a valuable tool to ensure that the children are financially provided for should the death of one parent occur.

Please contact TLG with your questions about Shared Parenting Plans, optional language, or your divorce/dissolution.