Court ordered former husband to maintain life insurance

In In Re Richardson, the El Paso Court of appeals upheld a trial court’s order of contempt. A former husband was found in contempt for failing to comply with the divorce court’s judgment that he maintain a life insurance policy, with his former wife as the beneficiary for the benefit of their children. This obligation remained in effect so long as he owed child support payments.

Summary of the Life Insurance Dispute

Thomas Richardson and Julie Richardson were involved in a dispute over debts and assets from their marriage. . The court also required Thomas to maintain a life insurance policy for $350,000 with Julie as the beneficiary until their youngest child turned 18.

In 2014, Julie alleged that Thomas had committed multiple violations of the decree, including not paying her the awarded judgment amount or the attorney's fees, failing to turn over certain properties to her, and failing to designate her as the primary beneficiary of his life insurance policy. After a hearing in 2015, the court held Thomas in contempt for nine separate violations of the divorce decree and ordered him confined in the El Paso County Jail for 18 months or until he met the conditions laid out by the court. The commitment was suspended and Thomas was placed on unsupervised community supervision for ten years on condition that he complied with the court's orders.

In 2016, Julie moved to revoke the suspension of the contempt order, alleging Thomas had failed to comply with the court's conditions. Thomas responded by filing a Chapter 13 bankruptcy petition and listing the debts owed to Julie and her attorney as non-priority, dischargeable debts. Julie subsequently filed a motion for the trial court to classify the debts as domestic support obligations under the Bankruptcy Code, which the court granted. Thomas then dismissed his bankruptcy proceeding.

The court held a contempt hearing in October 2016, revoking Thomas's community supervision for failing to comply with the court's orders. Thomas was ordered to be committed to the custody of the Hudspeth County Sheriff until he fulfilled the court's conditions.

Court of Appeals Affirms Contempt for the Life Insurance Requirement

Thomas Richardson appealed the contempt order, arguing that the requirement to name his ex-wife Julie as the primary beneficiary of his life insurance policy was unclear.. He also argued that there was no provision in the Texas Family Code that imposed a duty on a parent to maintain life insurance for the benefit of the children.

The Court of Appeals disagreed, finding that the provisions in the divorce decree, the October 27, 2015 contempt order, and the October 20, 2016 contempt order were consistent and unambiguous. They all clearly stated that Thomas had to maintain a life insurance policy of not less than $350,000, naming Julie as the primary beneficiary for the benefit of their children, and provide written proof of this coverage.

The Court also made clear that while the Family Code might not directly state a parent's duty to maintain life insurance for the children, it does stipulate that a child support obligation continues even after the obligee's death. The court may also order a child support obligor to secure a life insurance policy to ensure that the support obligation is met in the event of the obligor's death. Hence, the court had the authority to order Thomas to maintain a life insurance policy for the children's benefit and hold him in contempt for not complying.

We often see disputes over life insurance benefits arising from divorces and related property and decree obligations. Give us a call if you are involved in such a life insurance beneficiary dispute. J. Michael Young (800) 323-1857