Failure to carry life insurance as required in divorce related to will support will not relieve the estate of the decedent.   In a recent case where a decedent’s estate challenged the right of the ex-spouse to enforce an obligation to carry life insurance, a trial court’s decision to force the estate to pay was  upheld.   As most people with children who are divorced know, the typical settlement agreement or judgment of divorce contains an obligation to carry some amount of life insurance in order to replace a parent’s child support obligation in the event of that parent’s untimely death. Luckily, statistics say that the life insurance will not be needed, but as we all know, sometimes tragedies happen.

Such was the case in the recently decided matter of In the Estate of John P. Boyle,deceased.  To view the case, click here  In that matter, John P.was divorced from his wife, Susan, in July, 1995. They had one child, John M.Boyle. The judgment of divorce provided for a term of alimony to be paid to Susan as well as for child support on behalf of John M.. At the time of divorce, he was obligated to maintain a $250,000 life insurance policy for his ex-wife and his child. When the alimony obligation was finished, the beneficiary of the policy was to be his son. Relevant to this case was the provision that the decedent was to “continue to provide a life insurance policy through his place of employment in the amount of $250,000…” When the alimony obligation ended, John  P, the father changed the beneficiary designation to his son, John M. 

Years later, John P developed depression, and then lung cancer, and eventually left his place of employment. He passed away when John M was nineteen and attending college. John M then found out that his father had terminated the life insurance policy several years prior when he left his employment. The decedent’s executor probated the will, and John M filed an action against the estate seeking payment of $250,000 based on his father’s obligation to maintain the life insurance policy.

The trial judge in the Probate Part found that John P had breached his obligation to maintain the life insurance policy and entered judgement against the estate in the amount of $250,000. The estate appealed. First, the estate tried to argue that the matter should have been heard in the Family Part, as it is only a Family Part judge that has the authority yo enforce the obligation arising from a matrimonial action. The Appellate court rejected this argument.

The estate next argued that since the judgment of divorce provided that the life insurance was to be though his place of employment, there was no obligation to maintain life insurance after he left his job when he became ill. The trial court disagreed, finding that the words,  “through his place of employment” were merely descriptive of the policy. The court noted that children are third party beneficiaries of marital settlement agreements and further that parents have an obligation to provide security of continued support for children. The Appellate Division agreed.

Finally, since John M was over the age of eighteen at the time of his father’s death, the estate tried to argue that there was no longer an obligation to carry the insurance. The court found this argument without merit as John M was a full time college student, living with and dependent on his mother, at the time of his father’s death.

This case offers some important reminders for those in the process of negotiating a settlement agreement, or who are asking for support during a trial. In addition to simply making a request to have the payor maintain life insurance, make sure it is clear that the obligation exists regardless of whether there is employment related insurance or not. Moreover, make sure that any settlement agreement clearly states that in the event of a death, any unfulfilled obligations become obligations of the estate of the obligor. These simple tips can help avoid litigation later on.