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Can the Court Required Life Insurance for a Child or Spouse?
Absent a written Agreement between the parties, the Maryland Court cannot require either spouse to maintain life insurance for the other spouse's benefit or for a child's benefit.
However, parties are free to enter into a written Agreement which requires life insurance, typically done to insure against the loss of child support or alimony. In such event, the Court will enforce the terms of the parties' Agreement.
When establishing life insurance for the benefit of a minor child, it is important to establish a Trust to name a trustee who is responsible for receiving the proceeds on behalf of the minor child. Without a Trust, the Court can order life insurance proceeds payable to a minor child to be held in a financial institution until a guardian of the property is appointed by the Court or the child attains age 18, when the funds will be paid to the child.
Under Maryland law, child support is determined based on the Income Shares Model. Therefore the monthly support amount for the child is proportionally shared between the two parents based on their incomes, past W-2s, and child support worksheets. One parent will then pay the other parent his or her share of child support. Considerations will also be made for existing debt, property settlement, mortgages, other children or any other financial considerations.
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