Am I Required to Maintain Life Insurance to Secure My Child Support Obligation?

In many cases, when a party is ordered to pay a particular amount of child support, the court may also require that the party maintain life insurance to secure payment of that support in the event of his or her untimely death.  In the recent case of Bigge v. Walker, the court addressed the amount of life insurance a party needs to maintain.

In Bigge, the parties were divorced and had one child together.  Their divorce judgment required the father to pay $105 in child support per month plus $45 toward his arrearages and to maintain $100,000 in life insurance. Ten years after the divorce, in January 2013, the father applied for a reduction in his child support and life insurance obligations due to his unemployment and serious health issues.  In New Jersey, a party can apply to modify a child support obligation if they prove “changed circumstances.”  Lepis v. Lepis, 83 N.J. 139 (1980).  He also argued that defendant’s increase in salary and the child’s status as a full-time college student who was also employed part-time should factor into the modification decision.  The court, however, denied the application, but did lower defendant’s life insurance obligation to $50,000.

Defendant renewed his application for modification in February 2013, but again, the court denied the application.  The court neglected to make any findings to support its decision.  Thus, the father appealed. 

On appeal, the Appellate Division reiterated that a child support obligation could be modified based on a showing of changed circumstances, which could include a child’s attendance at college. The Appellate Division decided that the trial court failed to consider the parties’ change in incomes since the original support order was entered and the child’s change in age and financial status.

The Appellate Division also decided that the trial court erred by not making findings regarding the father’s life insurance obligation.  The Appellate Division observed that N.J.S.A. 2A:34-23 allows a court to “require reasonable security” to secure a child support obligation, which could include a life insurance policy.  However, because the court calculated that the father’s maximum child support payment, even if there were no downward modification, would be about $8,000 per year, the requirement of a life insurance policy in the amount of $50,000 is not “reasonable security.”  Ultimately, the Appellate Division remanded the case to the trial court for further proceedings.

A modification of a child support or life insurance obligation can be important for an individual who has recently become unemployed or fallen ill.  In these situations, the experienced attorneys at Sarno da Costa D’Aniello Maceri LLC can help.  Call us today at 973-274-5200.