When a couple separates, they know they will have to consider custody and parenting arrangements, support payments, and property division. One area that can be overlooked is life insurance.
During a relationship, most people name their spouse as the primary beneficiary of their life insurance policy. You want them to have the resources to care for themselves, and for you children if you die. After a separation, the idea of leaving anything to your spouse may feel like a horrifying thought. After all, you do not want them to have access to your money after all the hurt and betrayal that led to your separation. Many people in this situation change the beneficiary to be there children.
But what about your children? If you die and they are under the age of 19, they will not be able to claim that money until they turn 19. For older children this may not be a problem, but for younger children that could be many years away.
If your children are minors when you die, the insurance funds would likely be held in trust by the Public Trustee. The Trustee has a duty to be responsible with the money they are entrusted with. So even if your childrens’ surviving parent has full time custody of your children, they may have to go through the Public Trustee to access funds to buy things for your children.
It is common for separated spouses to name the other parent as a beneficiary or a trustee in the event of their death. This way, your children will have easier access to the funds you want them to have. Nobody wants to think of their children losing a parent while they are young, but a little planning now can give your loved ones one less thing to worry about during an already difficult time.
Only your insurance company can give you accurate information about how your life insurance policy works so you should speak with them directly about changes you want to make and what effects those changes will have.
If you have any questions about life insurance you can call us at (902) 826-3070 or email us at email@example.com to set up a meeting with one of our lawyers at our Tantallon law firm. You can also schedule a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By: Dianna M. Rievaj, MBA, LLB - Founding Lawyer
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