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Access options to life insurance policies to secure child support
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In the context of questions of maintenance law, the issue regularly arises as to the extent to which a person obliged to pay may be required to use assets in order to fulfill existing child-support obligations. In proceedings 103 F 1446/17, the Nuremberg Local Court (Amtsgericht Nürnberg) addressed the question of whether the realization of a life insurance policy held by the maintenance obligor is permissible in order to secure ongoing maintenance obligations toward a minor child.
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Background of the proceedings
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In the case decided, the maintenance debtor had no sufficient ongoing income to meet his maintenance obligation. However, a significant asset existed in the form of a life insurance policy. The minor child therefore asserted that, to cover child support, the maintenance obligor must draw on the accumulated life insurance policy.
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Judicial assessment of the reasonableness of realizing the life insurance policy
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The court undertook a differentiated assessment of whether it was reasonable to resort to the life insurance policy, in particular with regard to the purpose of the policy and the importance of child support. Central was the balancing of the maintenance obligor’s interest in preserving his retirement provision against ensuring the minor child’s essential needs.
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In the court’s view, securing ongoing child support generally takes precedence over preserving retirement provision capital. The maintenance debtor therefore, as a rule, cannot rely on being allowed to retain assets in the form of surrender values from life insurance policies to safeguard his own future retirement provision if, otherwise, the minimum maintenance needs of a minor child cannot be met.
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Requirements for access to life insurance policies
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The court clarified that the realization of a life insurance policy for maintenance purposes is to be considered in particular when there are no overriding, worthy reasons against early utilization and no other deployable assets or income are available. In such cases, the specific surrender value of the policy must be included in the overall economic assessment as realizable assets. An exception could exist where the policy was set up exclusively to cover a statutory maintenance obligation and access to it would entail unreasonable economic disadvantages for the debtor.
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Distilled from the judgment, it follows that life insurance policies are to be surrendered for the purpose of child support if otherwise there is a threat to the child’s welfare with regard to the securing of maintenance. The continuing maintenance obligation is to be classified as a protected interest of priority.
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Significance for practice
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The proceedings before the Nuremberg Local Court underscore the high status of child support within the context of asset realization. Persons obliged to pay maintenance cannot rely solely on the character of the life insurance policy as retirement provision in order to avoid this asset being used to secure child support.
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For assessing the reasonableness of realizing material asset positions, the respective circumstances of the individual case are always decisive. It remains to be seen how case law will develop in the future with regard to comparable constellations.
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If clients have questions about the use of assets to secure maintenance or about comparable issues, a well-founded and individualized legal review of the relevant facts and legal situation is recommended. Further information and options for legal advice in family law from MTR Legal Rechtsanwälte can be found at: Legal advice in family law.
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