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Life Health > Life Insurance

Life insurance decree terminable upon ex's remarriage

By Steven A. Meyerowitz

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An appellate court in Georgia, reversing a trial court’s decision, has ruled that an ex-husband’s obligation pursuant to a divorce decree to maintain life insurance on his life for a dozen years for the benefit of his ex-wife was terminable upon his ex-wife’s remarriage because it was “periodic alimony” and not a division of property.

The Case

George White and Vanessa Howard were divorced after 35 years of marriage. Among other things, the final divorce decree required that Mr. White obtain a term life insurance policy in the amount of $100,000 that named Ms. Howard as the beneficiary, and required that he keep the policy in effect for 12 years. The decree also recited that neither party was entitled to alimony and that “the transfers contained herein are intended to constitute … an equitable division of property and such transfers are not alimony.”

See also: It’s splitsville: Divorce and SPIAs

Several years later, Ms. Howard remarried. Mr. White asked the court to terminate his life insurance obligation, contending that it was a form of alimony that expired upon Ms. Howard’s remarriage. Ms. Howard moved to dismiss.

The trial court granted Ms. Howard’s motion, concluding that the life insurance obligation was an equitable division of property rather than alimony and, in particular, that the life insurance requirement was “a fixed obligation because it is set for a definite period of time and is not terminable by operation of law and is therefore not subject to modification” as periodic alimony.

Mr. White appealed.

Georgia Law

Georgia law defines: 

Alimony

as:

an allowance out of one [marital] party’s estate, made for the support of the other party when living separately.

OCGA § 19–6–1(a).

The Appellate Court’s Decision

The appellate court reversed, agreeing with Mr. White that the trial court had erred in concluding that his obligation to maintain term life insurance for 12 years for Ms. Howard’s benefit was property division rather than periodic alimony that terminated upon Ms. Howard’s remarriage.

See also: Why a poorly drafted spousal waiver can ruin a financial plan

The appellate court explained that the life insurance award was not property division because its amount and duration were indefinite; it might require Mr. White to pay premiums for 12 years, or it may be worth $100,000 plus one to 12 premiums, with the obligation satisfied at that point, depending on the unknowable fact of how long Mr. White lived.

Likewise, the appellate court explained, the life insurance obligation was not lump sum alimony because Mr. White’s lifespan was indeterminable and the divorce decree did not impose an exact number and amount of payments “without any other limitations or conditions.”

The appellate court rejected Ms. Howard’s argument that the life insurance obligation could not be categorized as periodic alimony because the divorce decree stated unequivocally that “[n]either Plaintiff nor Defendant shall pay or receive alimony” and that the life insurance requirement was “not alimony”; she also pointed to the trial court’s reference to the requirement as “a fixed obligation.”

The appellate court explained that, in reviewing awards in divorce judgments, it ascertained the nature of the awards as a matter of law, and neither the parties’ nor the trial court’s characterization of an award was controlling.

See also: The little mistake that could destroy a life insurance plan

Accordingly, it ruled, because the cost to Mr. White and the value to Ms. Howard of the requirement that he maintain $100,000 in life insurance for her benefit for 12 years were indefinite when the decree was entered, as the amount of that award depended on how long Mr. White would live, the award was “periodic alimony as a matter of law.” And, the appellate court concluded, as periodic alimony, Mr. White’s life insurance obligation terminated upon Ms. Howard’s remarriage, because the divorce decree did not expressly provide otherwise.

The case is White v. Howard, No. S14F0106 (Ga. May 19, 2014).  

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