NOT FOR PUBLICATION WITHOUT APPROVAL OF THE COMMITTEE ON OPINIONS.

Transcription

1 NOT FOR PUBLICATION WITHOUT APPROVAL OF THE COMMITTEE ON OPINIONS.. RENEE ASHMONT Plaintiff, v. STEVEN ASHMONT Defendant. SUPERIOR COURT OF NEW JERSEY OCEAN COUNTY CHANCERY DIVISION FAMILY PART DOCKET NO. FM CIVIL ACTION OPINION. Decided: November 17, 2015 Plaintiff, pro se Christopher Schweitzer for defendant L. R. Jones, J.S.C. What happens when a party breaches his or her court-ordered obligation to carry life insurance under a matrimonial settlement agreement or judgment of divorce? For the reasons set forth in this opinion, the court holds the following: 1) In divorce litigation, when a supporting party has an ongoing alimony and/or child support obligation, a court may order such party to carry life insurance as an important method of financially protecting a dependent party, or child as applicable, in the event of the supporting party s premature death; 2) If a supporting party has an obligation to carry life insurance, the court may direct that the supported spouse or other parent be named as the owner

2 of the policy, if permitted by the insurance company. This option is particularly relevant when the supporting spouse has a history of failing to adhere to his or her court-ordered life insurance obligations. 3) When a party willfully breaches a court-ordered obligation to carry life insurance, the court may issue multiple forms of relief under Rule 5:7-3, including but not limited to ongoing financial sanctions, until such time as the defaulting party complies with the obligation. 4) When a party violates a court order, but ultimately complies prior to the conclusion of enforcement litigation, such compliance does not completely erase or negate the violation. Nonetheless, remedial and corrective conduct is equitably relevant on the issue of mitigating sanctions and penalties which might otherwise be imposed under the circumstances. 5) As life insurance is an ongoing financial obligation intrinsically related to spousal and/or child support, an insurance provision in a judgment of divorce or settlement agreement is potentially subject to post-judgment modification upon a showing of a substantial change of circumstances, pursuant to the spirit of Lepis v. Lepis 83 N.J. 139, (1980). FACTUAL HISTORY Plaintiff and defendant divorced in 2007, following a lengthy marriage. They had two children. Pursuant to the parties matrimonial settlement agreement, plaintiff was granted primary residential custody of the children, while defendant agreed to pay plaintiff permanent alimony and child support. The agreement further required defendant to carry insurance on his life for the benefit of both plaintiff and the children in specified sums, so as to protect against the loss of spousal and child support in the event of defendant s premature death. The court incorporated the parties settlement agreement into a judgment of divorce.

3 In 2015, plaintiff filed a motion in aid of litigant s rights seeking various forms of post-judgment relief against defendant, including enforcement of the life insurance provisions in the settlement agreement. Specifically, plaintiff alleged that defendant was in breach of the agreement by failing to provide proof that he was maintaining life insurance on his life for the benefit of plaintiff and the children. Further, plaintiff alleged that defendant had actually failed to comply with his life insurance obligation for several years, thereby seriously compromising both her and the children s financial security in the event of defendant s premature death. As a result, plaintiff sought not only enforcement of the life insurance provisions, but also significant sanctions against defendant for his past and alleged ongoing violations of his life insurance obligation. In the course of the litigation, defendant ultimately admitted that he had been out of compliance with the life insurance provisions of the settlement agreement for approximately four years, and that he had no insurance in place during such time. Had the policy been in place, the estimated premium for such time period would have been approximately $7,440. Following receipt of plaintiff s enforcement motion, however, defendant did in fact belatedly bring himself into compliance with his obligations by securing a new life insurance policy, consistent with the terms of the agreement. 1 Defendant asks that due consideration be given to the fact that he did ultimately bring himself into compliance with the settlement agreement before the conclusion of the litigation. Notwithstanding defendant s tardy compliance with the settlement agreement, however, plaintiff continues to seek legal and equitable relief against defendant for his 1 At final hearing, plaintiff requested further supplemental documentation to confirm that the current policy also contained the correct updated beneficiaries.

4 past failure to maintain the policy, and for allowing his dependents to go uninsured for such a lengthy period of time. Additionally, plaintiff requests strict enforcement of the obligation in order to prevent any further lapses in coverage. Implicitly, her paramount concern is that after the litigation finally concludes, defendant might immediately fall right back out of compliance with his insurance obligation by simply failing to pay the next scheduled premium. Presently, plaintiff is fifty two years old and defendant is fifty four years old. According to defendant, he claims that he had to make a substantial effort to obtain the policy presently in place. The court further notes that the policy he ultimately obtained is apparently not a group policy or employment-related policy, but rather is a private policy for which he is paying the premium as both the insured and the named owner as well. LEGAL ANALYSIS It is well-settled under New Jersey law divorce law that a court may require a party with an ongoing spousal support or child support obligation to carry insurance on his or her life, in order to monetarily secure and protect such obligations in the event of the supporting party s premature death. See Grotsky v. Grotsky, 58 N.J. 354, (1971); Schwarz v. Schwarz, 328 N.J. Super 275, 286 (App. Div. 2000); Raynor v. Raynor, 319 N.J. Super 591, 607 (App. Div. 1999). Konczyk v. Konczyk, 367 N.J. Super 551, (Ch. Div. 2003). In Grotsky, supra, the New Jersey Supreme Court interpreted N.J.S.A. 2A:34-23 to authorize compulsory life insurance when applicable and appropriate, since the family court may make such orders as to the alimony or maintenance of the parties, and also as to the care, custody, education and maintenance of the children, or any of them, as the

5 circumstances of the parties and the nature of the case shall render fit, reasonable and just, and require reasonable security for the due observance of such orders. Id. Said the Court:... (T)he comprehensive terms of N.J.S.A. 2A:34-23 are not to be narrowed but are to be applied liberally to the end that, where circumstances equitably call for such action, the court may enter a support order for minor children to survive their father s death and may direct the father to maintain his insurance, naming the minor children as beneficiaries, for the purpose of securing due fulfillment of the support order during their minority. Grotsky, supra, 58 N.J. at 365). In 1988, seventeen years after Grotsky, the New Jersey Legislature formally amended N.J.S.A. 2A:34-25, to expressly empower family courts with the authority to enter orders establishing compulsory life insurance obligations. The statute, in its present form, now states:... Nothing in this act shall be construed to prohibit a court from ordering either spouse or partner to maintain life insurance for the protection of the former spouse, partner, or the children of the marriage or civil union in the event of the payer spouse's or partner's death. 2 Accordingly, when parents divorce, it is very common for a supporting spouse with an alimony obligation to carry a life insurance obligation on his or her own life, with the supported spouse as the beneficiary for so long as the alimony obligation remains in place. Similarly, so long as a divorcing parent has a child support obligation, it is equally common 2 The legislative history of the amendment includes comment from the Senate Judiciary Committee Statement to Senate Bill No. 976, which reiterates that the amendment provides that the court may order a spouse to maintain life insurance for the protection of the former spouse or any children. Senate Judiciary Committee, Statement to Senate Bill No (1988). See Jacobiti v. Jacobiti, 135 N.J. 571, 578 (1994).

6 for that parent to carry a life insurance obligation, with the child as beneficiary and the custodial parent as trustee. 3 In some cases, a supporting spouse may have life insurance available as an employment-related benefit, at little or no cost, as part of a group policy. In other cases where work-related life insurance is unavailable, a private policy may be necessary at private cost, if reasonably affordable. The cost of securing a private policy may depend on various factors, including but not limited to (1) the age and health of the insured, and (2) the amount of the death benefit under the policy. VIOLATION OF COURT-ORDERED LIFE INSURANCE OBLIGATION When a party unilaterally violates a court order duty to provide life insurance, the question arises as to what can be done to protect the interests of the ex-spouse or child(ren) whose financial interests are supposed to protected by the policy? For starters, the aggrieved spouse may file an enforcement motion in aid of litigant s rights under Rule 1:10-3. Pursuant to Rule. 5:3-7(b), the court may assess a host of additional remedies for violation of a support order, either singly or in combination, including suspension of an occupational license or driver s license consistent with law (R. 5:3-7(b)(3)); economic 3 While perhaps not as often seen in divorce settlement agreements, it is generally in a child s best interests for both parents, including the custodial parent, to each carry life insurance on their lives, so that the child is financially protected in the event of premature death of either parent, not just the non-custodial parent. Usually, the other parent is named as trustee, unless there is bona fide and persuasive evidence that such arrangement is contrary to a child s best interests. Nothing in this opinion should be misinterpreted to hold or suggest that generally only a non-custodial parent, as opposed to both parents, should carry life insurance obligation to protect a dependent child following divorce. Rather, it is often important for both parties to carry such insurance, when available and reasonably affordable under the circumstances. In this case, the parties divorce agreement does in fact contain a mutual obligation for both parties to carry life insurance for the benefit of the children. Plaintiff alleges she is in compliance with her own obligation, and defendant does not dispute same.

7 sanctions (R. 5:3-7(b)(4)); community service (R. 5:3-7(b)(5); incarceration, with or without work release (R.5:3-7(b)(6); and issuance of warrant upon further violation (R. 5:3-7(b)(7)). 4 A violation of a life insurance provision designed to secure a support obligation may be tantamount to a violation of a support obligation itself. Moreover, when one violates a support-based order, R. 5:7-3(b)(8) contains a catch-all provision which authorizes a court to order any other appropriate remedy. This broad rule is consistent with the principle that a court of equity has the discretion to craft and devise its remedies and shape them so as to fit the changing circumstances of every case and the complex relationship of all the parties. See County of Essex v. Waldman, 244 NJ Super 647, 666 (App Div., 1990). Depending on the circumstances, equitable provisions may vary from one case to another See. Vasquez v. Glassboro Service Assn. 83 NJ 86, 108 (1980.) Family Court, as a court of equity, has broad discretion in cases to render decisions which are creatively equitable and appropriate. See P.J.G. v. P.S.S., 297 N.J Super 468, 472 (App. Div., 1997); Quinn v. Quinn, 118 N.J. Super 413, 415 (Ch. Div., 1972). In other factual contexts, courts have equitably addressed issues regarding life insurance in order to protect the interests of financial dependents. See Raynor v Raynor, 319 N.J. Super 591, 614 (App Div. 1999) (private life insurance proceeds may potentially be used to contribute to college costs of children following death). See also Della Terza v. Della Terza, 276 N.J. Super 46,49 (App. Div. 1994) (obligation to maintain life insurance with a 4 Rule 5:3-7(b) contains other additional remedies for non-payment of child support, which by their very nature would not be applicable to a circumstance where an obligor fails to provide life insurance, including an order fixing an amount of support arrears into a judgment (R. 5:3-7(b)(1) and payment of arrears on a periodic basis (R.5:3-7(b)(2). As life insurance proceeds are only payable upon the obligor s death, and by a third party insurance company, the death benefit arguably cannot be construed as arrears while the obligor is alive, even if he or she is in fact in violation of a court order by failing to maintain life insurance for the dependent s benefit.

8 dependent child as a beneficiary, established in a judgment of divorce, translates into a right of the beneficiary to seek the proceeds of the policy paid to another party). In cases regarding support of dependent children, the guiding principle is the best interest of the children and protecting their right to support, either before or after a parent s untimely passing. In the present case, the court finds that defendant clearly violated the terms and spirit of the parties settlement agreement by failing to provide life insurance protecting both his alimony and child support obligations for several years, in violation of court order and plaintiff s rights. There is insufficient evidence that he was unable to obtain a policy, either for financial reasons, health reasons, or any other reasons excusing same. While there is a mitigating relevancy to the fact that, following plaintiff s filing of an enforcement application, defendant did obtain a policy, such present action does not alter the fact that he was out of compliance with his obligation for an unreasonable and sustained length of time, which worked to his own financial advantage and to the improper detriment and risk to both plaintiff and the children. Under the circumstances, the court enters two specific forms of relief in this matter, relating to (A) change of ownership of the current policy, and (B) financial sanctions. A) OWNERSHIP OF POLICY First, the court orders that if permitted by the insurance company, defendant will transfer ownership of the life insurance policy to plaintiff. Even when there is no history of an obligor violating a life insurance provision of an existing order, there is often a practical, common sense logic for the party who is receiving

9 support, as opposed to the party paying support, serving as the owner of the life insurance policy. This logic arguably increases to higher levels when, as in the present case, the insured has a history of previously violating life insurance obligations established under court order. There are major differences between being an insured under a policy, the beneficiary under a policy, and the owner of the policy. The insured is the person whose life is insured, and upon whose death the insurance company makes a payment to the named beneficiary under the policy. The beneficiary is the party named to receive the payment of death benefit upon the insured s death. The owner, however, is the party who owns the policy. Generally, the owner may be, but does not necessarily have to be, either the insured or the beneficiary. Critically, the owner is generally the party who receives any and all notices and communications from the insurance company regarding the status of the policy, including invoices, notices of proposed cancellation for failure to pay premium, changes in policy terms, and renewal dates. Absent express authorization from the owner and/or court order, the insurance company generally may not directly communicate with, or provide information about the policy to a third person. In a divorce scenario, if the insured is also the policy owner, and if he or she fails to pay the premium or otherwise keep the policy in effect, then the other party as a nonowner may not receive any notice at all from insurance company of the policy s lapse. Rather, the notice may only go directly to the owner, who may or may not provide copies of such notice in timely fashion to the other party. Further, even if there is a specific court order which requires the insured to provide notice to the other party upon an anticipated

10 or actual lapse or change in coverage -- either for non-payment or for any other reason -- it is possible that the insured may nonetheless improperly violate the notice provisions of such a court order as well, to the other party s detriment. Under some agreements or court orders, an insured who is also the owner of a life insurance policy may be required to provide a non-owner ex-spouse with a signed authorization form, so that the non-owner may communicate directly with the insurance company on issues concerning coverage. Such a signed form, however, does not automatically mean the insurance company, which is not a party to the divorce litigation, will fully comply with same. Moreover, even if the insurance company does in fact comply, such an arrangement constantly puts the burden on the non-owner to affirmatively request updates on the policy, which may or may not coincide with an event that has already caused the termination or modification of the policy in the interim. Such event may include the owner s non-payment of the bill, or unilateral and surreptitious request for a change in the amount, term, or beneficiary of the policy, without advance notice to the other party. Therefore, when an ex-spouse is the intended beneficiary ( to protect alimony) or trustee (to protect child support) of an obligor s life insurance policy, there is an inherent practical advantage to such party also serving as the owner when the insurance company permits such designation. That being noted, it is also possible that in some cases, an insurance company may not permit a non-insured to become an owner of the policy under certain plans. For example, if a party is insured under a work-related group policy, it is possible that the insurer may not permit the employee s spouse or ex-spouse to be an owner of the policy, since (a) the policy is a group policy rather than an individual policy,

11 and (b) the spouse is not an employee under the group. 5 In the present case, however, defendant s policy is not a group policy or part of a work-related benefit. Rather, the policy is a single person policy, procured and privately paid by defendant. The major benefit in this case to plaintiff being the owner of the policy, is that she will then have actual notice of the bills as well as any proposed changes in the policy, supplied directly to her by the insurance company itself. For example, if defendant refuses or again fails to pay the invoice in the future, plaintiff at the very least will already have the bill in hand, and will then have the option at her discretion to advance the money for payment of the bills so that the policy does not lapse, while she seeks reimbursement in court from defendant for violating the order. Otherwise, if plaintiff does not advance payment for the bill and simply brings an enforcement motion against the insured for nonpayment, the policy may lapse before the matter even comes to court. Moreover, the insurance company -- as a non-party to the matrimonial litigation -- may have no obligation to reinstate a lapsed policy following expiration of any applicable grace period, even if the defendant was in violation of the order. Still further, while the court may order a former insured to obtain a new replacement policy, there is no guarantee that one will be offered by, or obtained from, an insurer under the circumstances. Meanwhile, the beneficiary may be left with no insurance coverage at all and may thus be completely unprotected. For this reason, an ex-spouse who is the beneficiary or trustee under a life insurance policy may decide that it is in his or her best interest to advance the premium, even if 5 Accordingly, when a divorced spouse provides coverage under a work-related group policy, both parties to the divorce are well-advised to review the policy and determine issues such as ownership, notice of changes and similar relevant issues concerning possible modification of coverage.

12 financially difficult to do so, and to then seek reimbursement from the violating party.. While the ex-spouse may have no court-obligation to do so, he or she at the very least may have the option to respond to the notice and take preventative action to mitigate potential loss and termination of what might otherwise be an irreplaceable policy. The court recognizes that an ex-spouse who is a beneficiary or trustee under a policy may have apprehension about being the owner of the policy as well, since the insurance company will send the bill for payment of premium to the owner in his or her name. The beneficiary may be concerned about suddenly having responsibility for the bill, when the judgment of divorce or settlement agreement requires the other spouse (i.e, the insured ) to pay for the policy. The fact that an insurance company sends the bill to a beneficiary as owner, however, does not mean that such mailing alters or changes the terms of a divorce decree regarding ultimate responsibility for payment between the parties. Rather, so long as the beneficiary/trustee spouse provides the bill to insured in reasonable time and fashion, the insured s legal responsibility remains legally intact, regardless of whether the insurance company initially forwarded the bill to the beneficiary s attention as owner, and so long as the owner forwards a copy of the invoice to the responsible party a reasonable time before the due date. Accordingly, in the present case, the court directs that within thirty days, defendant will arrange to transfer ownership of the life insurance policy to plaintiff, if permitted by the insurance company. He will further sign and provide to plaintiff within seven days a signed and completed authorization form which will permit plaintiff to communicate directly with the insurance company about the policy, including steps regarding transfer of ownership. Even after transfer of ownership, however, defendant will still be responsible

13 to make all payments on the policy in timely fashion. Plaintiff will provide defendant with notice, with scanned attachments, of premium amounts and due dates, at least thirty days in advance of all due dates, which defendant will pay at least ten days in advance of each due date, with concurrent copies to plaintiff containing proof of payment. If, for whatever reason, defendant does not pay in accordance with his obligation, plaintiff may at her election pay the amount due so as to avoid a lapse in the policy due to non-payment, and may thereafter seek reimbursement and sanctions and other remedies against defendant, including but not limited to costs and reasonable legal fees as applicable, resulting from defendant s non-payment. If the existing insurer does not permit a transfer of ownership of the current policy, then there are at least two other available options. First, if defendant remains the owner of the policy, he will nonetheless be obligated to provide plaintiff with an authorization form which, at least theoretically, will provide plaintiff with the possibility of ongoing communication with the carrier relative to the status of the policy and due dates for premiums. 6 Second, plaintiff may attempt to obtain a policy of comparable coverage and cost with the same or another carrier, in which she is designated the named owner, with defendant to reasonably cooperate in the application process accordingly. 7 If she is 6 As noted, however, it is possible that some carriers may nonetheless object or otherwise decline to provide information to a third person in timely fashion other than a policy owner, even with a signed authorization form. 7 In Meerwarth v. Meewarth 71 N.J. 541, 544 (1976), the New Jersey Supreme Court held that in appropriate circumstances and for good cause, a court may order divorced husband to cooperate in obtaining insurance on his life for financial protection of wife and children, including cooperate in an examination. The court further held that each case must stand on its own facts, and deference must be given to the trial court s ability to weigh the equities and take appropriate action. The need for the insured s cooperation in the application process may be particularly relevant when (a) there is no existing policy already in place, and (b) the amount of the death benefit is large enough for the insurance company to require a medical exam as part of the application process. In the present case, however, there is already an existing policy in place, and thus no need for a new application so long

14 successful in doing so, then at that time such policy may replace the existing policy, and will remain the ongoing financial obligation of defendant. There may be other equitable options as well, which may be the subject of further application. B) SANCTIONS FOR PAST VIOLATIONS Pursuant to Rule. 5:3-7, the court may issue multiple forms of sanctions for violating a support-related order. The options include, but are not limited to, financial penalties under R. 5:3-7(b)(4). If a party still remains out of compliance, then the court may order, among other provisions, daily or other periodic sanctions until such time as the party comes into compliance. In the present case, plaintiff seeks either daily sanctions or penalties consistent with the amount of money defendant saved by dishonoring the agreement, i.e., $7440. Had plaintiff actually been out of pocket this amount of money, her argument might have been fully accepted by the court, which potentially may have penalized defendant this entire amount, and/or issued other sanctions under Rule 5:3-7 as well. Further, based upon the seriousness of the issue and the economic harm which could have been caused to plaintiff, a financial penalty of this amount would not have been unreasonable, particularly since this amount was equal to the amount of money defendant improperly saved by failing to comply with his obligation. Moreover, if defendant had in fact continued to remain out of as the insurance company permits assignment or transfer of ownership of the existing policy from defendant to plaintiff, who as the recipient of support has an insurable interest in defendant s life as per the parties settlement agreement and judgment of divorce.

15 compliance with the obligation, then an ongoing daily sanction would not have been unreasonable, since one of the purposes of sanctions is to prompt compliance. While defendant did violate the agreement, however, the court in its discretion also considers the fact that defendant ultimately did bring himself into apparent compliance prior to the issuance of sanctions and the conclusion of this litigation. Further, he ultimately did not cause plaintiff to suffer significant and actual economic damage through his long-running but remedied violation. When one breaches a court order, but then ultimately brings him/herself into compliance prior to the conclusion of litigation, such remedial action does not erase or negate the violation as if it never occurred. Nor does such action or automatically or necessarily reduce sanctions or counsel fees (when applicable) which may have previously been incurred by the aggrieved party in enforcing the agreement. Nonetheless, subsequent corrective conduct is in fact an equitable and relevant factor on the issue of mitigating sanctions and penalties which might otherwise have been imposed under the circumstances. In particular, there is a value in the family court for tools which create and support a realm of positive and persuasive reinforcement for a breaching party s cooperation, even if such cooperation comes very late in the day. In the long run, tardy compliance is still highly preferable to continuous non-compliance. For the foregoing reasons, and under the totality of the circumstances the court will assess sanctions against defendant. The amount, however, will not be $7440, but $2500, plus reimbursement of plaintiff s $50 filing fee for her enforcement motion. The court finds that a penalty of the designated amount strikes an appropriate and equitable balance on the fact-sensitive scales of justice. While defendant violated both the order and plaintiff s

16 rights in a significant long-running fashion, he did ultimately take corrective action before plaintiff suffered egregious financial loss, or any significant loss for that matter. 8 As regarding plaintiff s concern that defendant might fall back out of compliance with his insurance obligation once the litigation ends, the court notes that its decision to mitigate of the penalty against defendant is based not upon defendant s technical compliance with his life insurance obligations for only moment in time, but more significantly, upon his anticipated ongoing maintenance and compliance with his obligations into the reasonable future. Accordingly, if defendant again breaches of his life insurance obligations after the entry of the order concluding this case, plaintiff may seek further appropriate relief, including but not limited to an order for enhanced sanctions and other remedies under the totality of the circumstances, and subject to the right of defendant to respond. 9 POSSIBILITY OF FUTURE MODIFICATION Notwithstanding the above, however, there are also occasions when due to legitimate changes in health, age, or economic or non-economic circumstances, a party can genuinely no longer meet the requirements of maintaining a certain level of life insurance without incurring substantial hardship. 10 In such instances, the party may in good faith seek a modification of his or her court-ordered life insurance obligation, including but not limited 8 A counsel fee claim, which is distinct from a financial sanction or penalty, is not relevant in this case, as plaintiff represented herself and thus incurred no counsel fees relative to enforcement. Hence, the distinct issue of how late compliance, as opposed to continued non-compliance, affects a counsel fee claim is outside the scope of this opinion. 9 Subsequent to the decision in this matter, defendant submitted confirmation that he had completed the ownership change form supplied by the life insurance company, to effectuate the change of ownership of the policy from defendant to plaintiff. 10 This situation may especially occur when a term policy naturally expires and the insured is now either much older or less healthy than at the time of divorce, meaning that the cost of the policy will likely be higher due to an increase in risk of death.

17 to a temporary change in the amount of the death benefit to a more affordable premium. Support obligations are of course subject to modification. See Lepis v. Lepis 83 N.J. 139, (1980). As life insurance is an ongoing financial obligation intrinsically related to spousal and/or child support, a life insurance provision in a judgment of divorce or settlement agreement is potentially subject to post-judgment modification upon a showing of a substantial change of circumstances as well. See Schwarz v. Schwarz, 328 N.J. Super 275, 286 (App Div. 2000); see also Kothari v. Kothari, 255 N.J. Super 500, 514 (App. Div. 1992). A motion to modify a life insurance provision may ultimately be granted or denied in the court s discretion, depending on the merits and comparative equities presented. For example, if the cost of the life insurance premium has skyrocketed to the point of becoming wholly unaffordable at a certain level of coverage, or if an obligor has become largely uninsurable for a renewed policy at a reasonable cost due to advanced age or a major health history, such as cancer or a heart attack, such circumstance may equitably and logically support judicial review and possible modification of one s court-ordered life insurance obligation. Even in cases with legitimate changes in circumstances, however, an obligor with a court-ordered life insurance obligation does not have the right to simply ignore that obligation without follow-up application for court review, and an order granting modification. Absent express consensual agreement between the parties, the obligor carries the responsibility of first filing a motion with the court, with notice to the other party, when seeking a possible reduction of an ongoing life insurance obligation, along with any corroborating evidence supporting the objective legitimacy and good faith behind such request. Only after the court actually reviews and grants such motion, and approves a modification of an existing life insurance obligation, may the obligor then act upon same.

18 Logically, if an applicant files a motion to modify a life insurance obligation on the grounds that he or she cannot afford the policy at a certain level, or that he or she has become uninsurable beyond the term of the current policy, that applicant carries the burden of proof to demonstrate to the court that (a) he or she has made firm, specific, concrete efforts to comply with the order and obtain the policy ( preferably attaching proof of completed applications and denial letters, if available, and with personal identifiers redacted to the extent possible), and (b) he or she has thoroughly researched the availability of insurance from different companies at comparative costs and different levels of coverage (attaching copies of estimated premium quotes for different levels of coverage and death benefits, from bona fide insurance carriers or agents). Put another way, a motion to modify a life insurance obligation must contain far more than an applicant s unsubstantiated, undocumented, blanket assertion that I am uninsurable, or, I cannot afford any life insurance at any cost regardless of premium or terms, or I called an unnamed insurance agent and they told me over the phone that they cannot insure me. As with all other financial aspects of divorce, life insurance is not always an all-or-nothing proposition. If the cost of maintaining insurance at a certain court-ordered level increases and becomes objectively unaffordable, a modification application can be filed seeking a potential reduction in mandatory coverage to a more reasonably affordable level. Alternatively, coverage may remain at the higher amount, but with the custodial parent contributing a share toward the cost of the increased premium as well if he or she wishes to keep such higher amount of coverage in place, notwithstanding the supporting spouse s

19 change in financial circumstances. There may be various other ways for a court to fairly allocate an increased premium as well, if and when equitable to do so A related issue, which may often be relevant at the time of divorce and initial establishment of the life insurance obligation, it is fair and equitable for only the obligor to carry the cost of the annual premium for maintaining life insurance, or whether the other party should equitably contribute to the cost of the policy as well. One may argue that in an alimony case, the supported spouse should contribute to the cost of the policy, since that party is the only one who can financially benefit from the policy. Similarly, if the policy is to cover child support for children, and if both parents can reasonably afford to contribute to same, some may argue that both parents should bear some responsibility for the cost of the premium as well. Alternatively, it may be fair and equitable in certain cases for each parent to have an obligation to carry life insurance for the children s benefit and at his or her cost. These issues may logically be discussed, probed, negotiated and resolved or litigated at the time of divorce.