Obtaining life insurance for security of maintenance

Many times a person who is required to make a monthly maintenance or child support payment is also required to maintain some kind of financial security during the pendency that the maintenance or child support is to be paid.

The addition of IMDMA 504(f), authorized the court to order a maintenance payor to secure his maintenance obligation with life insurance, resolving a prior conflict among appellate districts.  In re Marriage of Ellinger, 378 Ill. App. 3d 497, 317 Ill. Dec. 812, 882 N.E. 2d 692 (3d Dist. 2008).

Maintenance, child support and property payments can be secured during the payor’s life by the use of a collateral trust, and, after the payor’s death, by life insurance, a life insurance trust or a collateral trust, or by the payor’s estate.  Any obligation to pay maintenance after the payor’s death must be “unequivocally” and “unmistakably” stated in the judgment for dissolution or settlement agreement.  In re Estate of Lundahl, 332 Ill. App. 3d 646, 266 Ill. Dec. 21, 773 N.E.2d 756 (2d Dist. 2002).

Although this may seem like an additional burden that is tacked on to the payor’s already outstanding responsibilities, logically it makes sense.  If the Court has determined that an individual or family is in need or has a right to maintenance or child support, if the payor deceases prior to their responsibility to pay being over, the burden could possibly fall upon the state; if the individual or family calls upon the state or federal government for financial services due to the deficiency in support that they are receiving after the payor’s death.  Usually the burden that is placed on payor is minimal compared with what it could possibly be on the state.

For the full statue (750 ILCS 5/504 (f))  see: http://www.ilga.gov/legislation/ilcs/documents/075000050k504.htm


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