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Effects of Irrevocable Life Insurance for future children

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  • Effects of Irrevocable Life Insurance for future children

    Hi, first time posting.

    Ex wants to be named irrevocable beneficiary on my partner's life insurance to cover their children. However, we want to have children of our own and my fear is that they will not be covered because of this.

    Here's my questions...
    1) Can he name multiple irrevocable beneficiaries - ex / his mother OR ex / myself?
    2) How hard hard is it to convince a court to allow for minor beneficiaries with a 3rd party trustee (his mother or professional)?
    3) I also read on Manulife about naming the beneficiary in favour of "my children equally". Anyone heard or done this?

    How do we protect our future family?!?!

  • #2
    Your partner could set up different life insurance policies. Personally I don't think irrevocable beneficiaries should be in place for CS, because eventually CS is not payable and then the ex or whomever would still be the beneficiary. Irrevocable beneficiaries should be for unlimited SS, but that is just my opinion.

    However, I do know you can name multiple beneficiaries. My partner has a life insurance policy... his brother is named on a portion of it to cover CS and I am named on the rest of it, so this is an option as well.

    Comment


    • #3
      Originally posted by cpartener View Post
      How do we protect our future family?!?!
      I find these questions on life insurance always concerning. Why people fight over life insurance is beyond me. Most people make demands about life insurance when separating to create conflict and to continue to engage with the other party. Many people use them as a negotiating tactic and cry fowl on them all the time.

      I have never, not once, in my sitting in court rooms auditing hearings ever heard a justice utter a word other than criticism on both parties for being so silly.

      On justice did say this once which I thought was funny. I would provide the name but, I can't quote it exact so here is what I remember:

      The judge asked a series of questions.

      1. Are either of the parties have a terminally ill?
      2. Are either of the parties over the age of 65?
      3. Are either of the parties planning to travel to a war zone?
      4. Are either of the parties employed in a dangerous field?
      3. Are either of the parties on planning to die in the next 8 years? (The child in question was 10 years old at the time.)

      When both lawyers said NO to all the above questions the judge basically turned to the litigants and asked them flat out if they wanted to spend any more time paying their lawyers to negotiate for something that will most likely never happen. The judge said he would be more than happy to continue hearing the matter but reminded them that it was probably costing them between 2-8 dollars each a minute each to debate this nonsense.

      Some times, when I am sitting in a court room it is hard not to laugh out loud.

      Good Luck!
      Tayken

      Comment


      • #4
        Originally posted by Tayken View Post
        The judge said he would be more than happy to continue hearing the matter but reminded them that it was probably costing them between 2-8 dollars each a minute each to debate this nonsense.
        Every judge should use this line in court.

        Comment


        • #5
          Originally posted by involveddad75 View Post
          Every judge should use this line in court.
          Some times, when life serves you lemons... You make Justice Lemon aid...

          Comment


          • #6
            Most people make demands about life insurance when separating to create conflict and to continue to engage with the other party.
            An important point that is lost on many people - the court can set someone as the irrevocable beneficiary of life insurance, however people cannot be compelled to obtain life insurance.

            It is not uncommon to see a plea that "Party XXX get life insurance of value YYY ..."

            Please see
            CanLII - 2012 ONSC 5339 (CanLII)

            Specifically,
            [15] However, we find that Ferguson J. erred for another reason. Subsection 34(1) gives jurisdiction to require a spouse who has a policy to designate a beneficiary. There is no jurisdiction to order a spouse to obtain life insurance or reinstate life insurance. To make such an order was an error of law.

            Comment


            • #7
              What if there is an existing policy where the ex-spouse is no longer the beneficiary. Can a judge force the spouse to be put back on as the beneficiary?

              Comment


              • #8
                Can a judge force the spouse to be put back on as the beneficiary?
                Subsection 34(1) gives jurisdiction to require a spouse who has a policy to designate a beneficiary.

                Comment


                • #9
                  Originally posted by OrleansLawyer View Post
                  An important point that is lost on many people - the court can set someone as the irrevocable beneficiary of life insurance, however people cannot be compelled to obtain life insurance.

                  It is not uncommon to see a plea that "Party XXX get life insurance of value YYY ..."

                  Please see
                  CanLII - 2012 ONSC 5339 (CanLII)

                  Specifically,
                  More importantly, going to court to fight over an existing life insurance policy and to have it made irrevocable to the children is not necessary as a support order binds an estate unless the court orders otherwise.

                  Request for an order that the father obtain life insurance and designate the child as a beneficiary – The father does not have a life insurance policy. This court cannot order him to obtain one. See: Feinstat v. Feinstat, 2012 ONSC 5339 (CanLII), 2012 ONSC 5339 (CanLII). A support order binds an estate unless the court orders otherwise (subsection 34 (4) of the Family Law Act). This order will make it clear that the support order is binding on the father’s estate.
                  CanLII - 2013 ONCJ 512 (CanLII)

                  ...

                  CanLII - Family Law Act, RSO 1990, c F.3

                  An order for support binds the estate of the person having the support obligation unless the order provides otherwise.
                  So, going to court to ask for something that is already binding and recognized law serves no other purpose than to create conflict or to be used as a negotiating tactic. I have not personally seen an order that is "otherwise stated" with this regard.

                  Good Luck!
                  Tayken

                  Comment


                  • #10
                    Originally posted by OrleansLawyer View Post
                    Subsection 34(1) gives jurisdiction to require a spouse who has a policy to designate a beneficiary.
                    But, it isn't worth the effort as 34(4) binds the estate unless the court has ordered otherwise.

                    Comment


                    • #11
                      But, it isn't worth the effort as 34(4) binds the estate unless the court has ordered otherwise.
                      If all of my assets are spent, disbursed before death or able to avoid probate (not many people pay probate tax on the shoe box full of cash), then a charge against the estate has little value.

                      Depending on the testator's age, their life insurance may well be the only financial payout from their death. How many people in their 30's have enough equity in their homes/investments to meet a decade or more of child support obligations?

                      Comment


                      • #12
                        What happens when all of one's assets are spent and there is one life insurance policy but the person to whom support is owed is not named on the life insurance policy?

                        I assume they would be a "tit out of luck" would they not?

                        Comment


                        • #13
                          In my divorce order I am named irrevocable beneficiary in trust for the children on my ex's life insurance policy and I agree to remove my name as beneficiary if/when CS obligations end. In my case I felt it necessary because my ex has a history consistent with cancelling/allowing to default policies that directly impact the children without my knowledge. CS obligations for the youngest child are expected to be life-long.

                          Comment


                          • #14
                            Originally posted by OrleansLawyer View Post
                            If all of my assets are spent, disbursed before death or able to avoid probate (not many people pay probate tax on the shoe box full of cash), then a charge against the estate has little value.
                            My understanding is that if there is an existing policy then, the law applies and they can make a claim against the estate for the outstanding C/S. I could very well be wrong but, we are talking about a life insurance policy that is held at a third party financial institute that is a responsible party to the matter and follows the law... Not a shoe box insurance policy.

                            The insurance policy only becomes payable on death... it is hard to spend a life insurance policy before you die. In accordance with the Rules the claim for C/S takes priority on any other matter in my understanding. But, again, I could very well be wrong.

                            Originally posted by OrleansLawyer View Post
                            Depending on the testator's age, their life insurance may well be the only financial payout from their death. How many people in their 30's have enough equity in their homes/investments to meet a decade or more of child support obligations?
                            But, the argument we are discussing here (if you recall) is existing life insurances policies. Not equity in a home. If the person in question didn't have a life insurance policy prior to the separation then a court can't order one be put in place... So, the hypothetical situation you are using here wouldn't apply because the person doesn't have and can't be ordered to have a life insurance policy. If they did then the Rules apply and the surviving parent can make a claim on the insurance policy in accordance with the Rules.
                            But, I am just a monkey at keys smashing rocks into a keyboard... could be wrong on this one.

                            Good Luck!
                            Tayken

                            Comment


                            • #15
                              Originally posted by arabian View Post
                              What happens when all of one's assets are spent and there is one life insurance policy but the person to whom support is owed is not named on the life insurance policy?

                              I assume they would be a "tit out of luck" would they not?
                              Not sure about AB but, in ON, you can make a claim on the policy and seek payment for support. That is my understanding of the law and the case law I am reading on the matter.

                              Comment

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