As couples in Pennsylvania move toward divorce, many issues come into play. The process of property division can take a lot of time and effort, and can involve a great deal of negotiation. However, as spouses are deciding who gets to keep Uncle Bill's pipe collection and who is entitled to the family game collection, it is essential to remember to address intangible assets as well.
One item that should not be overlooked is health insurance. When possible, negotiate who will remain on which policy and for what length of time. Any changes to an existing health insurance policy must be carefully considered to avoid insurance fraud. For example, leaving an ex-spouse on your policy following the divorce could lead to trouble down the road.
Life insurance is another area of concern. Many divorce settlements specify that a spouse who is required to pay alimony or child support must also purchase term life insurance in an amount sufficient to cover their financial obligations in the event of death. However, even once the policy is in place, it may be necessary to check periodically to ensure that the premiums are paid and the policy is active.
Auto insurance is another detail that can be easily overlooked. However, changing from a joint policy to two single policies can raise both spouses' insurance costs considerably. These types of changes should be accounted for before the divorce is final, not after.
When it comes to insurance and divorce, preparation and diligence are key. Understanding your insurance needs is also part of the property division equation. Long after one has forgotten the pipe collection gathering dust in a closet, the coverage provided by the above-mentioned forms of insurance will give Pennsylvania residents a sense of security that can be priceless.
Source: Reuters, "YOUR MONEY-How to untangle your insurance plans in divorce," Geoff Williams, Sept. 11, 2012