When a man who was shelling out money to support two families dies, some sticky problems can arise. The deceased, a citizen of Canada, was paying spousal and child support to his ex-wife. They had two children. However, he was also caring financially for his fiancee and their unborn child. When the married couple divorced, the man not only agreed to support payments but also to keep his former wife on his life insurance policy as the irrevocable beneficiary.
The man agreed to keep up his million dollar policy without an end date or a reduction. But when the couple separated, the man, who continued to live in Canada, became involved with a woman who lived in the United States. He developed cancer around the same time his girlfriend — who would become his fiancee — became pregnant with their son. The man died before his divorce became final.
The man had a will prepared before his death and in it — contrary to a court order — he wanted his estate, and life insurance shared between his wife, their two kids and his fiancee and her yet unborn baby. This resulted in a trial and two appeals. The man’s estate was insolvent, so the only asset was the life insurance policy.
Ultimately, the court of appeal decided that the man’s wife and their children were creditors but limited their rights. The court said they were creditors only in that proceeds of the policy were needed to satisfy the deceased man’s obligations for the child and spousal support. Any remaining amount would be considered as dependant’s relief for his fiancee and their son.
Sometimes family law issues can get complicated. It’s vitally important to sit down with a lawyer to discuss issues like child support in the event of filing a divorce or separation. A lawyer in Canada who is experienced in family law can answer any questions, provide guidance and offer ongoing support.
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Source: financialpost.com, “Support payor’s death leads to complex court case involving estranged wife, fiancee and an unborn child,” Laurie H. Pawlitza, Accessed on Aug. 11, 2017