What happens when a deceased father failed to maintain life insurance for the benefit of his ex-wife and the children of the marriage entitled to receive support? Is there a claim, against whom, and for how much?

Those were the questions answered by the Appellate Division, Second Department, in its August 31, 2016 decision in Mayer v. Mayer.

There, the plaintiff (mother) was the second wife of Paul S. Mayer (father). Pursuant to their 2000 judgment of divorce, the father was, among other things, obligated to pay child support and educational expenses for the children of that marriage, Alanna and Matthew. The judgment of divorce also provided that the father was to maintain a term life insurance policy in the face amount of $1,000,000 for the benefit of Alanna and Matthew, with the mother being named as trustee on their behalf, “until such time as his support obligation is fully satisfied.”

In 2001, the father married Kristen and thereafter had two children, Jonah and Ryan.

In 2005, due to the father’s claimed inability to pay the premiums on the $1,000,000 policy required under the judgment of divorce, the policy was converted into two policies insuring his life, both of which were issued by New York Life. One policy, with a face amount of $200,000, listed the father as the owner and the mother as the beneficiary. The other policy, with a face amount of $100,000, listed the mother as both the owner and the beneficiary. The mother paid the premiums on the $100,000 policy.

In 2006, the mother moved in the Family Court to have the father held in contempt for, among other things, failing to maintain the $1,000,000 policy required by the judgment of divorce. The Family Court found the father to be in contempt and directed him to comply with the life insurance provision of the judgment of divorce. However, apparently the father could not obtain a new policy in the amount of $1,000,000 because of ill health.

Continue Reading Redressing the Failure to Maintain Life Insurance Required by Divorce Judgment

A court may order that life insurance be maintained to secure the payment of child or spousal support or the payout of a distributive award. It is not to be an award in an of itself. Its purpose is not to create an additional fund on the death of a party, but rather to secure that support and property payments contemplated by the divorce decree will be made, even on death.

Thus, in its June 20, 2014 decision in Marfone v. Marfone, the Appellate Division, Fourth Department, modified the judgment of Oneida County Acting Supreme Court Justice Joan E. Shkane to reduce the required life insurance from $500,000.

We agree with defendant, however, that the amount of life insurance the court required defendant to maintain with respect to his child support obligations is excessive, and we therefore modify the amended judgment by reducing the amount of that life insurance from $500,000 to $300,000.

Domestic Relations Law §236B(8)(a) authorizes the use of life insurance to secure the divorce payments:

8. Special relief in matrimonial actions.
a. In any matrimonial action . . . the court may also order a party to purchase, maintain or assign a policy of . . . on the life of either spouse, and to designate in the case of life insurance, either spouse or children of the marriage . . . as irrevocable beneficiaries during a period of time fixed by the court. The obligation to provide such insurance shall cease upon the termination of the spouse’s duty to provide maintenance, child support or a distributive award.

Thus, insurance can be ordered to be maintained on the life of either party, to be owned by either party, naming either spouse or the children as irrevocable beneficiaries for a period no longer than the divorce decree payments.

Continue Reading The Divorce Life Insurance Trust

A spouse’s pre-divorce judgment death results in the unenforceablitity of divorce action orders, including the automatic orders mandated by Domestic Relations Law §236(B)(2)(b). As a result, Westchester County Supreme Court Justice Paul I. Marx held in his April 17, 2014 decision in A.V.B. v. D.B. that a husband was without a remedy for his wife removing the husband as a beneficiary of her retirment account and life insurance policy.

After 13 years of marriage and two children, the wife commenced this divorce action on September 12, 2012. Pursuant to stipulated Preliminary Conference Orders, it was agreed that the wife would be awarded the divorce on the grounds of irretrievable breakdown, an Attorney for the Child was appointed and the pre-trial schedule was fixed.

On April 22, 2013, the wife committed suicide. During the administration of her Estate, it was learned that on February 14, 2013, while the divorce action was pending, the wife had changed the named beneficiaries on her ING 403(b) account from her husband as her sole beneficiary to the parties’ two children as 50% primary beneficiaries. It was further discovered that on or about March 10, 2013, the wife changed her designation of the husband as the sole named beneficiary on her Prudential life insurance policy to the husband as a 1% primary beneficiary, the parties’ daughter K. as a 49% beneficiary and daughter R. as a 50% beneficiary.

The husband’s counsel then submitted a letter to Justice Marx with a proposed order directing that the named beneficiaries on the wife’s ING account and Prudential life insurance policy revert back to the date of the commencement of the action and directing ING and Prudential to pay out the balance in the wife’s annuity and the “death benefit” under her life insurance policy to the named beneficiaries that existed before the changes were made. At that time, the husband’s lawyer also submitted the supporting affirmation of the attorney for wife’s Estate, declaring that the Estate consented to the proposed order.

Justice Marx declined to sign the proposed order. Instead, the Court scheduled a conference at which the Court directed defense counsel to move by Order to Show Cause. Although no papers were submitted in response to that motion, Justice Marx nevertheless denied it. The relief sought in the motion was not warranted by the law, nor by a good faith extension of the law.

While it is regrettable that Plaintiff violated the automatic orders and seems to have reached beyond the grave to thwart Defendant’s efforts to recover his share of her assets, this Court is unable to remedy the violation in this proceeding.

Continue Reading Automatic Orders, Violated During Divorce Action, Cannot Be Enforced After Pre-Judgment Death

Life Insurance.jpgThe June 19, 2012 decision of Suffolk County Supreme Court Justice Peter H. Mayer in Mehran v. Mehran (PDF) resolved a motion made in a post-divorce judgment action by an ex-wife to enforce several provisions of the parties’ 2003 post-nuptial settlement agreement. That agreement was incorporated, but not merged into their 2004 judgment of divorce.

Among other alleged defaults, the ex-wife sought to specifically enforce those provisions of the agreement which obligated her ex-husband to maintain a $1,000,000.00 life insurance policy naming as irrevocable beneficiary the ex-wife as Trustee for the benefit of their unemancipated children.

The agreement further provided that the purpose of the provision was secure the payment of obligations of the ex-husband under the agreement in the event of his death.  Upon the ex-husband’s death, the ex-wife is to use the insurance proceeds to pay all of those obligations. If any proceeds are left over, the excess proceeds are to be distributed equally among the ex-husband’s surviving children (the ex-husband also had children of a prior marriage). The agreement provided:

1. The [ex-husband] agrees that he will maintain in full force and effect, and neither pledge, hypothecate nor encumber the existing policies insuring his life in the minimum face value of One Million ($1,000,000.00) Dollars naming the [ex-wife] as Trustee for the benefit of the children as irrevocable beneficiaries of said policy, with [sic] such time as the children are emancipated.

2. It is the intention of this article that the [ex-husband] maintain sufficient Life Insurance to cover all of his obligations to this agreement.

3. In the event of the [ex-husband’s] demise and the payment to the [ex-wife] of the life insurance proceeds as trustee, she shall pay the sums due from the [ex-husband] pursuant to this agreement. When all sums pursuant to this agreement have been fully paid, and if there is any balance in said account, said balance shall be distributed equally among the [ex-husband’s] children surviving him.

The ex-husband opposed his ex-wife’s motion for summary judgment specifically enforcing this provision by arguing that he and ex-wife were unable to agree to the terms of a proposed trust agreement and that he, in fact, had an insurance policy in existence with the children named as irrevocable trustees. He argued that he needed a trust agreement to “protect his other children” from his first marriage. He sought to name a son from his first marriage as “co-trustee.” Notwithstanding the fact that the ex-wife was not named as the trustee, the ex-husband contended he had substantially complied with the provision.

Justice Mayer disagreed. Naming a party as a “beneficiary” on a life insurance policy instead of an “irrevocable beneficiary” as required by the terms of a post nuptial agreement is not substantial compliance with the provision. Rather Justice Mayer held the ex-husband committed a material breach of the agreement for which a contempt finding and an award of counsel fees may be proper. When the terms of a written contract are clear and unambiguous, the intent of the parties must be found within the four corners of the contract, giving practical interpretation to the language employed and the parties’ reasonable expectations.

Here, the parties’ agreement is clear and unambiguous in directing that ex-husband name ex-wife “as Trustee for the benefit of the children as irrevocable beneficiaries of said policy” until such time as they are emancipated.

Declaring the ex-husband’s argument that he needed to protect his other children was “specious, at best,” the Court noted that the agreement itself provided for the distribution of any remaining funds from that policy to all of ex-husband’s children, after his obligations under the agreement were paid.

Thus, the ex-husband was directed to obtain or to amend the life insurance policy he presently maintains insuring his life in the minimum face value of one million ($1.000,000.00) dollars naming the ex-wife as Trustee for the benefit of the children as irrevocable beneficiaries of said policy, until such time as the children are emancipated.

The ex-wife was represented by Andrea Seychett Schear of Melville, NY. The ex-husband was represented by King & Streisfeld of Lake Success, NY.

Gavel main.jpgThe rule of law discussed by Monroe County Supreme Court Justice Richard A. Dollinger in Lomaglio v. Lomaglio is undoubtedly correct. An ex-husband may not be required to provide health insurance beyond the period he is required to pay his ex-wife maintenance. The question is was he allowed to correctly apply the law?

With allusions to Gilbert and Sullivan’s H.M.S. Pinafore, Justice Dollinger answered his own question:

When does a trial court judge get to review or opine, expand upon or possibly modify an appellate division ruling? Answer: “hardly ever.”

Domestic Relations Law §236B(8) is straightforward enough. A divorcing spouse may not be required to provide health insurance beyond the support period:

8. Special relief in matrimonial actions. a. In any matrimonial action the court may order a party to purchase, maintain or assign a policy of insurance providing benefits for health and hospital care and related services for either spouse or children of the marriage not to exceed such period of time as such party shall be obligated to provide maintenance, child support or make payments of a distributive award.

So why is Justice Dollinger’s just-published February, 2012 opinion implementing this provision front page news (New York Law Journal 5/21/2012)? It is because 12 years ago, the Appellate Division Fourth Department appears to have held that Mr. Lomaglio would be obligated to provide health insurance to his ex-wife, permanently, although the 18-month period for which he was obligated to provide maintenance to his ex-wife had expired.

Continue Reading Did Judge Overrule the Appellate Division to Hold Ex-Husband May Not Be Required to Provide Health Insurance Beyond Period He Is Required to Pay Support to Ex-Wife?