Opinion ID: 1750963
Heading Depth: 1
Heading Rank: 2

Heading: Vested Equitable Interest

Text: Pamela argues that the divorce judgment requiring her former husband Bret to maintain his life insurance policy and to name Stephen as the irrevocable beneficiary created in Stephen a vested equitable interest in Bret's policy that could not be defeated without Stephen's consent. In Williams v. Williams, 276 Ala. 43, 158 So.2d 901 (1963), this Court held that a divorce judgment that required a father to maintain his then existing life insurance policy and to name his minor children as irrevocable beneficiaries of that policy created in the children vested equitable interests in the policy that could not be defeated by changing the beneficiary under the policy to someone other than the children. The divorce judgment in Williams provided: `It is further ORDERED and DECREED by the Court that [the father] shall change [the] beneficiary in the existing life insurance policy on his life presently in effect so as to name his above named minor children as irrevocable beneficiaries thereof; and he is further required to keep said insurance in effect during the minority of the said children.' 276 Ala. at 45, 158 So.2d at 902. The father in Williams, in defiance of the divorce judgment, named his mother as beneficiary of the life insurance policy. This Court held that the children nevertheless had superior rights to the proceeds of the policy because the divorce judgment created in the children vested equitable interests in that policy:  An agreement by an insured, in consideration of the settlement of property rights by which he agrees to make his children the sole irrevocable beneficiaries of a policy of life insurance, vests them with an equitable interest therein which may not be defeated without their consent. . . . . . . .  The legal consequence of the decree in the divorce suit was to give the children a vested equitable interest in the policy, and the subsequent change of beneficiary did not establish superior rights in the new beneficiary. In violation of the agreement and the decree, the insured wrongfully attempted to deprive his children of the proceeds of the policy by an attempted change of beneficiary. Equity will intervene and declare them the beneficiaries in the policy. 276 Ala. at 46-47, 158 So.2d at 903 (emphasis added). In Frawley v. U.S. Steel Mining Co., 496 So.2d 731 (Ala.1986), a divorce judgment required a father to maintain a life insurance policy and to name his minor child as the irrevocable beneficiary of that policy. However, in defiance of the judgment, the father never named the child as the beneficiary of the policy. This Court, citing Williams, held that the divorce judgment created in the minor child a vested equitable interest in her father's insurance policy, even though the father had never named the child as the beneficiary of the policy. As noted, the divorce judgment in the instant case required Bret to maintain the life insurance policy that was presently in effect at the time that judgment was entered, i.e., a policy with State Farm. Based on Frawley and Williams, we hold that the divorce judgment created in Stephen a vested equitable interest in the State Farm life insurance policy.