TN Wife Attempted Return of Estranged Husband’s Estate from Paramour

Tennessee law case summary on surviving spouse election family law from the Court of Appeals.

Norma Simpson v. Faye Fowler – Tennessee divorce surviving spouse elective share.

Husband and wife were married in 1951 and divorced in 1967.  The reconciled, were again married in 1968, and lived together until 1990.  In 1990, they separated again.  However, they never divorced.  In about 1992, husband began a romantic relationship which lasted until his death in 2010.  About five years before his death, the husband changed the ownership of his bank account to a joint account with right of survivorship with his paramour.  At the time of the husband’s death, this account had a balance of approximately $28,000, most of which was husband’s pension and social security benefits.  The paramour was also the beneficiary of two life insurance policies, the benefit of which was approximately $8500.

After husband’s death, the estranged wife applied for a restraining order setting aside the transfer of the bank account and the change of beneficiary of the insurance policies.  The trial court set aside the two transfers, and ordered the resulting funds to be paid to the chancery court pending the administration of the husband’s estate.  The trial court held that they were fraudulent transfers, even in the absence of actual fraudulent intent, since they defeated the wife’s elective share of the estate.  The trial court relied on the fact that the transfer comprised most of the husband’s estate, and that the funds had originated from the husband.  The paramour appealed to the Tennessee Court of Appeals.

The Court of Appeals first noted that the trial court had not properly incorporated its factual findings into the order.  The Court of Appeals held that this required remand, since, even though it had been mentioned by the trial court, the trial court did not make any specific finding as to whether there was fraudulent intent in making the transfer.

The Court of Appeals held that such a finding was critical.  In order to prove a fraudulent conveyance, it is necessary to show that the husband had intended to practice fraud on the surviving spouse.  While the factors relied upon by the trial court might have been relevant to that determination, the fraudulent conveyance cause of action requires a finding of actual fraud, which the trial court did not make.  In making that determination, the court is required to consider all relevant factors, not just the ones that the trial court had considered.

Since the trial court had not made a finding of actual fraud, the Court of Appeals vacated the judgment and remanded the case.

No. W2011-02112-COA-R3-CV (Tenn.Ct. App. Aug. 28, 2012).

See original opinion for exact language.  Legal citations omitted.

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