Divorce Case: Life Insurance and Divorce
National Legal Research Group, Inc.)
In In re Marriage of Day, 31 Kan. App. 2d 746, 74 P.3d 46 (2003), the husband owned two insurance policies on the life of his mother. The husband and his mother were both involved in a farm business, and the policies were acquired at the request of a bank, for the purpose of ensuring that the business’s debts could be covered after the mother’s death. The first policy, in the amount of $90,000, was a term life policy with no cash surrender value. The second policy, in the amount of $10,000, was a whole life policy with a small cash surrender value. The premiums for both policies had been paid during the marriage with marital funds.
The trial court awarded the wife a percentage interest in the proceeds of the policies, to be paid upon the mother’s death. The percentage was equal to 50% of the total years during the marriage in which marital funds were used to pay the premiums, divided by the total number of years in which the premiums were paid before the mother’s death. The formula used to compute the percentage bears an obvious similarity to the formula commonly used to measure the marital share of retirement benefits. The husband was ordered to make all future premium payments.
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