Switch to ADA Accessible Theme
Close Menu
We speak English & Mandarin

Guiding You Toward A Better Future

San Jose Divorce Attorney > Blog > Divorce > Life Insurance And California Divorce

Life Insurance And California Divorce


California’s community property laws state that all assets acquired by either spouse during the marriage are the property of both spouses.  These laws have been in place for decades, going back to a time when very few marriages ended in divorce, and they were originally meant to protect people who brought less wealth into the marriage than their spouse from financial abuse.  Today, divorce courts apply the community property laws by dividing all the marital assets and liabilities evenly in half.  This means that, if you get divorced, you are entitled to half the value of the marital home, but you are also responsible for half of the debts your overspending spouse incurred during the marriage.  Whole or Universal Life insurance policies purchased during the marriage are also community property, but that is not the only way that life insurance policies can play a role in divorce.  If you and your former spouse are at an impasse in a disagreement over life insurance, contact a San Jose divorce lawyer.

Life Insurance Policies Are Community Property, Not the Sole Property of the Beneficiary

Like all assets purchased during a marriage, life insurance policies are community property, regardless of which spouse is the policy holder and which spouse is the beneficiary.  This means that each spouse is entitled to half of the value of the policy in the event of a divorce.  Frankie purchased a $3.5 million life insurance policy after suffering heart problems severe enough to require hospitalization.  He named his wife Randy as the beneficiary and told her that the purpose of the policy was to enable her to support their three children.  When they divorced, Randy argued that the policy should be her separate property, since she was the sole named beneficiary, but the court classified the policy as community property. However, the court disagreed and ruled the cash value to be divided equally.

Life Insurance for Alimony or Child Support

In some cases, the court will order the wealthier spouse to maintain a life insurance policy with the children or the former spouse as beneficiaries.  This is a way of securing the alimony or child support payments, especially if the supporting spouse is elderly or in a fragile state of health.  The courts most often order supporting spouses to keep life insurance with their ex-spouse as the beneficiary when the children have an ongoing need for support and it is uncertain whether the supported spouse will be able to meet their financial needs.  In other words, the court is most likely to order it in cases with children where there is a severe financial disparity between the parents.

Contact an Attorney for Help Today

How to divide community property is not up to the court’s discretion, however, which assets to classify as community assets is a matter open to interpretation by the court.  A San Jose divorce lawyer can help you fairly classify all assets, including insurance policies, as community assets or separate assets.  Contact Foster Hsu for help today.



Facebook Twitter LinkedIn

© 2020 - 2024 Foster Hsu, LLP. All rights reserved.
This law firm website and legal marketing are
managed by MileMark Media.