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Wealth Control Advisors, LLC
60 William Street, Suite 200
Wellesley, MA 02481
781-235-8891 MA telephone
781-235-8890 private fax
866-235-8991 outside Mass.
10781 Waterford Place
West Palm Beach, FL 33412
561-691-1380 FL telephone
info@wealthcontrol.com
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Case Study 5: Divorce
Another Ongoing Management Of Total Wealth involved a 52-year-old insurance client, with a successful dental practice, needing our advice about their existing life insurance policies. The client had been married for many years and had two grown daughters. Unfortunately, their spouse’s drinking was out of control and nothing anyone said, or treatments changed the behaviors. Finally, our client could stand no more and sought a divorce to protect their girls, the dental practice, and personal and financial life.
Our client had wisely purchased permanent life insurance, and the maximum disability insurance many years earlier as the business grew. Initially we performed a Divorce Assets Review to help our client and attorney understand what the client had before they started negotiation with the ex spouse and their attorney. We verified that all of the policies were in good order, and they would survive provided the current premiums were paid, and provide the expected distribution upon death.
We Collaborated with the client’s Trusted Advisors through out the divorce process helping the client and their attorney. Since the client had a medical issue which precluded their purchasing new insurance, we helped the client and attorney understand which policies were preferable to surrender and which would allow the client better financial advantage to keep, as well as transfer to the ex spouse. Since the policies had originally been purchased to benefit the girls, we recommended that instead of transferring the policies to the ex spouse, an irrevocable beneficiary change be made.
While the client and attorney tried to have stipulations in the divorce decree about how the transferred insurance be held by the ex spouse, we worked with the client to transfer the retained insurance into trusts for the benefit of the daughters. We also worked with the client’s attorney to update the client’s will, health care proxy, and durable powers of attorney as part of re-writing the trusts and will.
Instead of the irrevocable beneficiary change, the final divorce agreement transferred our recommended policies to the ex spouse, with the expectation that it would benefit the ex spouse later in life. This enabled the ex spouse liberty to choose how to manage the cash value or distribution benefit of the policies, with the stipulation that there would be no additional funds available from our client or their daughters.
Sadly, the ex spouse elected to cash out the policies, shortly after the divorce finalization. When those funds were quickly exhausted, the ex spouse tried to pressure both our client and family for additional funds. Because the divorce decree was specific, both the daughters and the client were able to decline the request, and were protected from any additional financial obligations.
You can read about our comprehensive Tailored Services, Our Clients, or How We Work, or Contact us to get started today.
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