New Jersey Assembly Bill A4346

New Jersey 2024-2025 Regular Session

• Introduced: 5/10/24
• Refer: 5/10/24

Caption

Provides for establishment of child support lien against life insurance proceeds; requires insurers perform child support judgment search.

Impact

If enacted, A4346 will require significant changes within the insurance and child support systems in New Jersey. It implies that insurers will have to take an active role in identifying child support judgment debtors and ensuring that any payouts are managed according to these requirements. The proposed changes aim to enhance the enforcement of child support payments by preventing judgment debtors from inheriting or benefiting from life insurance payouts without addressing their financial responsibilities first. This could potentially lead to increased compliance with child support orders.

Summary

Assembly Bill A4346 seeks to establish a mechanism for creating liens against the proceeds of life insurance policies and annuity contracts for individuals who are found to be child support judgment debtors. This bill mandates that insurance companies must perform searches for child support judgments before distributing any proceeds from these contracts. By imposing a lien, the bill ensures that any available funds are directed toward satisfying child support obligations owed by the insured or beneficiary before they can access their insurance proceeds.

Contention

While proponents argue that the bill promotes the welfare of children by ensuring that child support orders are fulfilled, there are concerns regarding privacy and the administrative burden placed on insurance companies. The requirement for insurers to conduct judgment searches may introduce delays in processing claims, possibly affecting beneficiaries who are not in default on their child support obligations. Additionally, critics may raise issues regarding the fairness of restricting access to funds that were not intended as child support but are instead part of personal estate planning or insurance benefits.