Husband and wife agreed to carry insurance on their lives in their divorce decree. Upon the death of a party, each of their two children shall be entitled to receive death benefits. Each child was entitled to $50,000.00 in death benefits.
The Agreement did not specifically mention husband’s existing life insurance policy. Husband had not changed the beneficiary on this policy to the children. The original beneficiary named remained the wife.
Husband died in a car accident. Wife claimed that the proceeds should be paid to her instead of to the children. The court ordered State Farm to pay the policy’s proceeds to the wife. The administrator of the husband’s estate appealed.
The administrator argued that the circuit court erred when it ordered State Farm to pay the policy’s proceeds to the wife. Specifically, the administrator argued that the fact that husband did not change beneficiaries on the life insurance policy does not affect the rights of the children. They were the intended beneficiaries. That was stated in the Agreement’s language.
Wife argued that the trial court correctly found that the Agreement did not require husband to make the children the beneficiaries of his existing life insurance policy. She said that the Agreement did not specifically refer to that policy.
The appellate court found that the Agreement’s language was ambiguous. It was susceptible to two different, yet equally plausible, interpretations.
On the one hand, the provision can be read to require husband to maintain the insurance policy he possessed at the time of the divorce. And to name the children as the beneficiaries of that policy.
Alternatively, the provision can be read to require husband to obtain an entirely new insurance policy for the benefit of his children. Other evidence should be introduced to determine the intent of the parties.
When interpreting a marital settlement, courts seek to give effect to the parties’ intent.
The judgment of the circuit court was reversed and remanded. The trial court had to look further into the intentions of the parties.
Aliton v. Hintzsche, 373 Ill.App. 3d 708.