When Pennsylvania couples head for divorce, the emotional upheaval of this momentous life event quickly clouds important decisions concerning custody, support and especially property division. The spouses must find a way of working out the financial details of divorce, but often the underlying causes of the split get in the way of any meaningful dialogue.
When it comes to insurance coverages, neglecting this aspect of the divorce can later negatively impact everyone involved, including the children. Residents of Delaware County should be prepared for all the complexities of property division as they assess their financial planning needs.
How do the courts divide property?
Pennsylvania is an equitable division state, which means that the court will decide on a fair division of marital property based on a number of factors, including:
- Length of marriage or prior marriage
- Age, health, employability, sources of income, including insurance and other benefits, and other factors of each spouse
- Economic circumstances and standard of living of each spouse
- If one parent will serve as custodian of a minor child
These and other considerations will influence the court’s decision on the fair but not necessarily equal division of marital assets.
When should discussions about insurance begin?
Talking about how to transfer or add coverages or change beneficiary designations should be a part of the inventorying of marital assets. The spouses may need to make changes to such insurance policies as:
- Auto insurance, which may include a transfer of ownership, change of address, or removal of one spouse from a policy
- Home insurance, which will involve a change of address for one or both parties, as well as changes in coverage or values, home security and, if one spouse becomes a renter, rental insurance
- Life insurance, which may involve a change in beneficiary designations, although it may be preferable to keep these untouched where there are children; if either the custodial parent or the ex who pays child support passes away, at least the coverage will provide for the children
- Health insurance, in which one spouse and dependents are on the other spouse’s policy; although the affected spouse can receive COBRA benefits, the premiums are high, and the divorce settlement should include provisions for covering these expenses
The couple should also discuss any existing disability or long-term insurance policies, and the divorce decree should spell out how these policies will continue and who will pay the premiums.