Justin Raber Attorney at Law

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Life insurance premiums and alimony in divorce

When a West Virginia marriage ends, one spouse may be required to pay alimony or life insurance premiums for the other spouse. These types of financial arrangements are made as a divorce is finalized. While the monetary expectations are detailed in the divorce proceedings, some questions regarding finances are likely to arise. One specific issue that should be addressed involves whether life insurance premiums can be counted toward the total amount of alimony payments.

Financial experts state that, if alimony payments are part of someone's divorce settlement, he or she is responsible for those payments. Though a person may be required to pay the life insurance premiums for an ex-spouse, the payments cannot be deducted from alimony. Likewise, if an ex-spouse was designated in the divorce decree as the beneficiary of a life insurance policy, the person is required to maintain the policy.

On the other hand, the spouse receiving the benefit would likely be responsible for paying taxes on the policy. Many divorce agreements establish such policies to provide funding in the event the spouse who is paying for the benefit dies. The installment payments for the policy would be considered taxable income to the spouse receiving the benefit.

Financial issues can be complicated in a West Virginia divorce. No one wants to be surprised by an unforeseen tax burden or unexpected expenses. It would be wise to contact a knowledgeable divorce attorney for assistance throughout the entire process. An experienced lawyer will work on behalf of their clients to achieve the best possible outcome in each of their cases.

Source: marketwatch.com, "Can I deduct the life-insurance premiums that I pay as alimony?", Quentin Fottrell, Aug. 24, 2017

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