Opinion ID: 1903543
Heading Depth: 3
Heading Rank: 1

Heading: Does the periodic alimony survive Jeff's death to bind his estate?

Text: ¶ 17. In Peacocke, this Court examined the general rule in this State that a claim for future periodic alimony terminates upon the death of the payor or upon the death or remarriage of the payee and cannot be made an obligation of the decedent's estate. 694 So.2d at 1253-54. In prior cases, this Court made a distinction between periodic alimony and lump-sum alimony. McDonald v. McDonald, 683 So.2d 929 (Miss.1996); Hubbard v. Hubbard, 656 So.2d 124 (Miss.1995); see Bowe v. Bowe, 557 So.2d 793 (Miss.1990). This Court in Hubbard, stated that unless it is clear from the record what sort of award (alimony) is given, we will construe any ambiguity as being periodic and not lump sum. 656 So.2d at 130; see Sharplin v. Sharplin, 465 So.2d 1072, 1073 (Miss.1985). Periodic alimony becomes vested only on the date each periodic payment becomes due. Bowe, 557 So.2d at 795; see Rubisoff v. Rubisoff, 242 Miss. 225, 235, 133 So.2d 534, 537 (1961). By way of contrast, lump-sum alimony is vested in the obligee when the judgment awarding it becomes final, retroactive to the date the judgment is entered, and therefore, lump-sum alimony is an obligation of the estate of the obliger if not paid before death. Bowe, 557 So.2d at 795; see Holleman v. Holleman, 527 So.2d 90, 92 (Miss.1988); East v. East, 493 So.2d 927, 931 (Miss.1986); Maxcy v. Estate of Maxcy, 485 So.2d 1077, 1078 (Miss.1986). ¶ 18. This Court in McDonald, 683 So.2d at 931, stated that: This Court has consistently held that periodic alimony is subject to modification and ceases upon the wife's remarriage or the husband's death. Gresham v. Gresham, 198 Miss. 43, 21 So.2d 414 (1945), Wray v. Wray, 394 So.2d 1341 (Miss.1981). With regard to lump sum alimony, however, this Court has historically held that such alimony constitutes a fixed liability of the husband and his estate and is not subject to modification. Butler v. Hinson, 386 So.2d 716 (Miss. 1980). The rule of law providing for the modification of a periodic alimony award arises from the nature of alimony itself, which is based upon the inherently changing financial ability of the husband to support his wife in the manner to which she is accustomed. As a result, the [c]hancellors of this state have the authority to modify periodic alimony awards upon a finding of substantial change in circumstances, regardless of any intent expressed by the parties to the contrary. East v. East, 493 So.2d 927, 931 (Miss.1986), (citing Brabham v. Brabham, 226 Miss. 165, 84 So.2d 147 (1955)). In the case of lump-sum alimony, however, said alimony is not considered to be in the nature of continuing support, but rather a property transfer which is vested in the recipient spouse at the time said alimony is awarded. Jenkins v. Jenkins, 278 So.2d 446 (Miss.1973). As such, considerations of the payor spouse's financial circumstances are irrelevant, given that an order for lump-sum alimony provides the recipient spouse with a vested right to receive said payments. The fact that payments of lump-sum alimony are often paid in installments may give said payments a superficial similarity to payments of periodic alimony, but said fact does not change the vested, non-modifiable nature thereof. ¶ 19. Under the rationale of Peacocke, the obligor's estate cannot be burdened with the obligation to pay alimony without an express provision that periodic alimony shall not terminate at the obligor's death. 694 So.2d at 1254. This Court has recognized that the parties may contract to have the obligator's periodic payments survive death and, therefore, continue as a binding obligation upon his estate. Smith v. Smith, 349 So.2d 529, 531 (Miss.1977); In re Estate of Kennington, 204 So.2d 444, 449 (Miss.1967). ¶ 20. However, in Sheppard, this Court expanded the rationale of Peacocke determining that periodic alimony payments did not terminate upon the death of the ex-husband where the agreement did not expressly provide that the alimony payments should terminate at the obligor's death. In Sheppard, the husband agreed to pay monthly alimony to the wife until her death or remarriage and further provided that this agreement shall be binding upon the parties, their administrators, executors and assigns. 757 So.2d at 174-75. The Court in Sheppard quoted the language contained in paragraphs 4 and 13 of the agreement as follows: 4. The husband further agrees to pay to the wife, as a form of permanent alimony and as his contribution toward the support and maintenance of the wife who's unemployed, the sum of $4,000.00 per month for the next five (5) years, beginning December 1, 1984, and automatically reducing to the sum of $3,000.00 per month after sixty (60) months, and continuing at the rate of $3,000.00 per month from and after December 1, 1989, until the death or remarriage of the wife or until otherwise reduced by the court ... 13. This [A]greement shall be binding upon the parties hereto, their administrators, executors and assigns. Id. at 175. This Court held that paragraph 13 of the agreement fulfilled the additional requirement that in order for the periodic alimony to survive the death of the payor spouse, the agreement must expressly bind the estate, thereby binding the estate to pay the alimony. Id. at 176. ¶ 21. The Court in Sheppard followed the rationale of Connecticut, Massachusetts and Pennsylvania courts interpreting whether a life insurance policy terminates alimony that had been expressly made binding upon the payor's estate. Id. at 176 (citing McDonnell v. McDonnell, 166 Conn. 146, 348 A.2d 575 (1974); Taylor v. Gowetz, 339 Mass. 294, 158 N.E.2d 677 (1959); In re Estate of Ervin, 430 Pa. 431, 243 A.2d 420 (1968)). In Sheppard, the Court held that where there is no language that ties the insurance policy to the alimony payments or any proof of intent to do so contained within the agreement, the agreement cannot be deemed to provide the insurance policy in lieu of alimony to fulfill the estate's alimony obligation. Id. at 176-77. ¶ 22. Here, the case is factually distinguishable from Sheppard. The parties' agreement obviously considered the inevitable fact that death is certain to everyone. A life insurance policy was expressly tied to Jeff's alimony obligation. This fact was absent in Sheppard. In the case sub judice, Jeff agreed in the agreement, paragraph III, to maintain an existing life insurance policy with Joan as the beneficiary to remain in effect for a sum not more than $164,000.00. The distinguishing fact is that in the case at bar the $164,000.00 life insurance proceeds was to be decreased by the rate of $4,000.00 for each $4,000.00 monthly alimony payment made by Jeff. It is apparent that the life insurance policy, which is plainly applicable at Jeff's death, stood as a guarantee that if he should die Joan would by agreement be entitled to receive the life insurance proceeds, totaling $164,000.00, less any actual alimony payments made before death, to satisfy the alimony obligation. The reasoning of the chancellor that the periodic alimony did not cease at Jeff's death was blatantly erroneous. The chancellor found that the life insurance proceeds were in addition to the alimony payments. The chancellor incorrectly applied the holding of Sheppard to the facts at hand quoting, the failure to mention the (payor's) death as an event of termination expressed an intent that it not be such an event. ¶ 23. A clear reading of the agreement in question conveys that in the event of Jeff's death, Joan would be entitled to the life insurance proceeds less the alimony payments received. The parties did not intend for the periodic alimony to survive as a continuing obligation on Jeff's estate as determined by the chancellor below. Therefore, we find that the chancellor erred in the first step of the court's analysis.