What Happens To Support Payments If You Or Your Ex Is Disabled?

 

We discussed this topic with Bill Pollock, CEO of Disability Specialists Inc.  What we learned was so concerning we wanted to share it with our readers.

Question:  When you use the term “Support Payments” what payments are you talking about?

Answer:  Support Payments include any payment the divorce decree stipulates has to be paid or incurred. Examples: Child Support, Alimony, medical insurance premiums/deductibles/co-insurance payments, private school tuition, college tuition, room, board, expenses, equalization payments, the buy-out of a business, etc.

Question: Since our readers are women, they could be:

1. Receiving Support Payments:

 

• stay at home moms with children and not working,
• working moms with children,
• Women whose children are grown but haven’t worked outside the home in many years and are dependent on spousal support to survive financially

 

2. High-income earners who are paying some form of support to an ex.

Question: Is there a way to protect moms in all of these categories?

Answer:  In order to answer this question, I have to explain how current agreements deal with the disability of the Payor.  Until recently there were only two solutions:

1. Child support is formula driven and based on the Payor’s income. If the Payor is disabled, the Payor files for a reduction in Child Support based on his/her reduced income.

Most decrees don’t address how Spousal Support or any other payments are dealt with if the Payor is disabled.  So, the Payor’s only option is to go back to court and fight over whether the Payor pays nothing or pays a reduced amount, which takes months to resolve, costs both the Payor and the Recipient $1,000’s in legal fees, and, in the case of affluent families, typically results in the Payor’s payments being reduced but not eliminated.

2. In a small percentage of decrees, the divorcees have agreed to reduced payments, if the Payor is disabled.

These are terrible solutions for both parties…it puts a huge financial strain on the Payor to continue payments while disabled and dramatically reduces the income of the Recipient, which is a life changing event for moms with kids and women who are not working.

Question:  How can Disability Specialists help solve this problem?

Answer:  DSI created a new disability insurance product that will continue 100% of the remaining payments stipulated in the divorce decree if the Payor is disabled. This policy is:

1. Inexpensive
2. Can insure any/all payments stipulated by the decree
3. Benefits can be paid direct to the Recipient or paid to the Payor and the Payor continues paying the Recipient per the terms of the decree

Question:  Is this policy available to everyone going through a divorce?

Answer: This policy was designed to insure business owners and people in white collar/professional/executive jobs with a total Support obligation of at least $300,000.

Question:  Will my attorney, CPA, or financial advisor know about this policy?

Answer:  This policy is only available through DSI.  While DSI markets it nationally, it’s relatively new and many financial advisors and attorneys have not taken the time to properly research it.  You should tell your attorney/financial advisor about the policy and have them contact me.

Question:  How do our readers find out more about this coverage?

Answer:  For more information visit www.gotodsi.com/divorce or call Bill Pollock at 888-279-8304 ext. 2003.