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What role could a life insurance policy play in a divorce?

On Behalf of | Apr 15, 2024 | Divorce

The process of dividing assets and wealth can be one of the most vital yet daunting aspects of preparing to dissolve a marriage. The types of assets involved in this process can be more than just items such as the family home or motor vehicles and may include complex assets such as retirement funds and insurance policies.

Life insurance is a topic that may be somewhat easy to overlook at times, and you might not even be aware of the role such assets could play in your divorce. Understanding what to expect regarding such assets could be vital to helping you prepare to seek guidance on your options and develop a strategy that focuses on your goals for the future.

Life insurance topics

There may be various factors that might influence the role a life insurance policy could play during a divorce, and some topics to address regarding such assets could include:

  • Separate assets: One of the first factors to address could involve determining whether a life insurance policy is separate or marital property, as this may influence whether a policy will be subject to property division.
  • Cash value: Even if a life insurance policy is a separate asset, any cash value accrued during a marriage could be marital and may play a significant role in the process.
  • Updating information: It may also be vital to know what types of changes to make when updating information on your life insurance policy, such as removing an ex-spouse as a beneficiary.
  • The kids: If you and the other party have children together, there may be some scenarios in which leaving his or her name on the policy could be the best path to protecting the interests of your kids.

Life insurance is just one example of a complex topic to consider when preparing for a similar change in life, and seeking advice on addressing such topics could prove essential to preserving your interests.

Dissolving a marriage

Preparing to dissolve a marriage can be stressful and intimidating under any situation. With so many topics to address and options to consider, it might be helpful to seek advice in navigating every step of the divorce process. Seeking such advice could help place you in a better position to make informed choices about your situation. This may also help you better prepare to create a strategy with which to seek the best outcome possible regarding your future in Colorado during court proceedings.