When her son Michael came to visit (after her most recent plastic surgery operation), she pulled out a box of life insurance files — including one for Donn. Michael was shocked since they’ve been split up for some time now and Vicki is currently in a relationship with boyfriend Steve Lodge.
But, we discovered, it's actually pretty common. And there's no way Donn doesn't know about it, even if Vicki thinks he doesn't.
Steven E. Trytten, Esq., a trust and estate attorney at Anglin Flewelling Rasmussen Campbell & Trytten LLP (AFRCT) in Pasadena, Calif., explains what the heck is going on.
"As a general rule to take out an insurance policy on another person two things have to be satisfied; an insurance interest — the person would have that if someone owes you alimony and that alimony stops at death and that gives her insurable interest. And, two, the other person has to consent to it."
Trytten adds that it's not really possible Donn doesn’t know about it, as the insurance company would likely have said they would issue this only with his consent.
"Never say never but insurance companies are pretty good about saying you’ve got to check all 99 boxes ... consent would likely be a signature on a consent form. [It would detail] the amount of coverage and who’s taking it out."
He advises people get the life insurance payment discussions out of the way during the divorce settlement and not later.
"One thing is to do this when you’re entering into your divorce, don’t get insurance a year later — do it at the settlement," Trytten says. "The professionals should guide you and tell you’re gonna get alimony and as part of the divorce we require so and so."
The life insurance usually covers what the person was paying in alimony although it is a different calculation, Trytten explains.
"With alimony you’re getting a certain amount every month or year, with insurance you get a lump sum to cover the payments that aren’t coming in. Most insurance policies are a flat amount. What most people do is figure out is in worst case scenario what they would need."
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