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Metairie Family Law Blog

How to handle a term life insurance policy in divorce

It is common scenario for Louisiana couples: One spouse takes out a term life insurance policy that names the other as beneficiary. But what happens to that policy in the event of a divorce? How can a life insurance policy that does not pay until someone dies be divided between the former spouses?

During divorce, all community property is subject to property division. Community property consists of the assets and debts that were acquired by either party during marriage, including things like real estate, retirement accounts, bank accounts, and even insurance policies. Many life insurance policies have no cash value, however. Rather, the policy pays only if and when the covered spouse dies during the term of the policy. Because there is no cash value, there is nothing to be divided.

Protecting yourself from spouse

A family court judge ultimately decides which assets and debts should go to each spouse during divorce proceedings. However, he or she must follow the property division laws regarding divorce that are established in the state. While spouses in equitable division states are not generally liable for their spouses' debt when they are merely listed as authorized users, individuals in community property states like Louisiana are not so fortunate.

Courts in community property states presume that any income that is earned during the marriage is community property. At the same time, any debts that are acquired during the marriage are presumed to be community debt. In order for a spouse to get the court to separate debt that was acquired during the marriage, the innocent spouse must prove by clear and convincing evidence that he or she was not responsible for the debt. This is a difficult burden of proof to meet that exceeds the standard required in personal injury cases.

Tips for divorcing parents

Any Louisiana resident who has gone through a divorce understands the emotional toll it can take, particularly if there are children involved. The turmoil of a major life change can be exacerbated by concerns about the impact to the children. It can be easy to let emotions take control, but maintaining one's perspective is best for everyone involved. Here are some important tips that may help a parent minimize the stress that can come with divorce.

First, don't place blame. While it may feel good to bash your ex, it is unfair to try to alienate the children against their other parent. It creates confusion for the children and may lead them to hide their feelings from you in the future. Likewise, do not look at custody as a battle to be won. If you find yourself arguing with your ex about the children's schedule or a change in plans, ask yourself why you are upset. It is one thing if the arrangement is bad for the children. However, if you are simply frustrated about being inconvenienced, you need to remember it's about them, not you.

Cuba to hand over couple, children to U.S. authorities

In a recent unusual case that may have caught the attention of some Louisiana residents, a couple who had lost custody of their two boys and is accused of kidnapping them and fleeing to Cuba will be handed over to U.S. authorities. The boys were first placed in foster care before their maternal grandparents in Florida were granted custody. Rather than working with the courts and paying child support for the children, it is believed that the accused couple broke into the grandparent's home and took their children to Havana.

Cuba has no extradition agreement with the United States, but the island nation did agree to return the family to the United States. According to a statement from U.S. diplomats working in Cuba, the boys are "safely on their way home," but it is unclear when the parents will also be returning to the states.

Divorce and real estate: A niche for specialized Realtors

Since Louisiana is a community-property state, unless otherwise indicated, property division, including real estate, is equitable. However, coordinating with a divorcing couple to effectively sell property can be easier said than done. A recent newspaper article reveals that this niche, selling property during a divorce, has become a specialty among some real estate professionals.

Issues, such as restraining orders, locked portions of homes and one spouse's desire to thwart a sale, are particularly sticky and require a great deal of experience to overcome. However, selling a home during a divorce is difficult even in amicable situations since the timing can hurt the home's value. Buyers who suspect a pending divorce tend to expect bargains. Therefore, experienced Realtors will carefully stage a home by filling closets and leaving carefully placed "props" throughout.

Advantages of being first to file for divorce

Louisiana residents may be interested to know that one divorce attorney to numerous stars, such as Maria Shriver, Mariah Carey and Heidi Klum, recently emphasized the advantages women have if they file for divorce first. She added that where the divorce is filed can especially impact the divorce process and related issues, such as child custody and support and alimony.

When a woman files first, she can also avoid some deceptive practices her spouse might attempt. One involves the husband consulting with a number of the top divorce lawyers in the area and developing a conflict of interest if she tried to retain any of them. This practice can prevent a wife from using a certain attorney even if her husband were only screened by the same attorney months ago and never actually hired the attorney. The attorney now has confidential information on the husband and cannot in good conscience represent the wife.

Looking out for the kids after a relationship ends

In today's society, many couples in Louisiana and in other states opt to create a partnership without formalizing the relationship, and they even bring children into their union. While this arrangement might offer some conveniences, it certainly brings disadvantages with it as well. One family lawyer explained in a recent piece on the topic that a couple must first be married if they are going to get a divorce. He added that the same piece of paper from the government that makes a couple man and wife also affords them legal protection.

He further elaborated that if a couple never marries, the man won't owe the wife spousal support if they separate. Alimony acts as transitional support so that she can reestablish herself financially, but she loses that benefit if they aren't married although he will need to pay child support. Additional legal benefits of marriage include inheritance, health insurance and equitable distribution of assets. In this case, he said, the biggest loser is usually the woman, who may give up career prospects to raise a child.

The true cost of divorce

When couples in Louisiana decide to split up, their main focus is usually on what they need to do to officially terminate their marriages. They are then likely to focus on child custody if children are involved. It is not uncommon for people to put the long-term financial effects of divorce to the backs of their minds despite the fact that it can have enormous costs beyond legal expenses.

Divorce can have a huge impact on people's taxes and retirement funds, and it may increase costs related to insurance. Couples who are married often end up with lower tax brackets than people who are single and have the same income. When they divorce, people end up having to file singly and may not be able to take advantage of deductions for having children if they do not end up with custody. Retirement funds and savings accounts are also split up when couples divorce, and re-funding a depleted account can take an extended period of time.

Study shows that divorce may impact church attendance

The Journal for the Scientific Study of Religion reported that a recently completed study indicates the divorce of religious parents can cause children to leave their church. The impact on those young people who left a house of faith was twice as great for the children of divorced parents as for those whose parents did not divorce.

The study confirms the link between divorce and a child's future religious behavior that has been established by other research; however, prior studies did not look at the religion of the parents as a factor. The professor who spearheaded the study speculated that those children may believe the marriage was planned by God, so they decrease their adult church attendance because of the divorce.

Splitting retirement accounts in late-in-life divorces

While many younger divorcing couples in Louisiana may have disagreements regarding their marital home because it represents the couple's largest asset, many baby boomers and other older divorcing couples may have most of their wealth stashed into retirement accounts. Because Louisiana is a community property state, retirement accounts automatically become part of the marital estate that can be split between the couple.

Older people generally have more funds in their retirement account than younger individuals. This is because older individuals are closer to retirement age, and they may consequently be more committed to accumulating additional funds so that they can have the type of retirement that they want, given a longer expected lifetime. However, the additional funds that they stash away in their retirement accounts can easily be cut in two by divorce.

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