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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.
Maryland law requires equitable distribution of property in a divorce. The court determines a fair award of property and debt. Unless the couple can reach a settlement, the court divides the marital property, pension, retirement, profit sharing or deferred-compensation plans. The court considers contributions of each party, the well being of the family, the property value, the economic circumstances of each spouse as well as current situations such as age, mental state, the duration of the marriage, and the interest each party has in the property.
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