Life insurance is another commonly misjudged area during divorce proceedings. Life insurance is often thought of as another insurance form, like auto and homeowner’s policies, instead of an asset. However, affluent individuals may accumulate significant value in life insurance without their spouse being completely aware of it. This can happen without one spouse intentionally misleading the other spouse; it’s an issue that simply isn’t on the radar.
Even when a comprehensive review of insurance is made as part of financial analysis in divorce, life insurance policies can be tough assets. This is because insurance may be structured in various ways depending on the goals and needs of the client, and it is often held in a trust as part of an estate plan. A person with extensive insurance and trust knowledge may be brought into a high-asset divorce to help determine the true current values of any policies and for the crafting of a recommendation on how those policies can be divided in an equitable manner.