CHRISTENSEN VS. CHRISTENSEN (DIVORCE PROPERTY & ALIMONY)

Statutes cited

Key holdings

Practitioner summary

The court determined the validity of an insured spouse's designation of children from a prior marriage as life insurance beneficiaries, where premiums were paid with community funds. Under NRS 123.230 as it then read, the husband had entire management and control of the community property, with like power of disposition, and could make a voluntary disposition of a portion of the community property, reasonable in reference to the whole, absent a fraudulent intent to defeat the wife's claims. Nixon v. Brown, 46 Nev. 439, 214 P. 524 (1923). For community-funded life insurance, the reasonableness inquiry focuses on the community funds expended in premiums rather than on the policy's face amount, a view consistent with Nixon and with Texas authority permitting moderate community-funded gifts not in fraud of the wife's rights. Because only $66 in community premiums had been paid against a community estate valued at $7,177.12, and there was no fraud, the gift was reasonable and valid. The court reversed and directed judgment for the sons.

In plain language

Harry Christensen, an employee of the City of Reno, had a $5,000 group life insurance policy paid for by small payroll deductions ($3.30 per month) taken from his salary after he married Jakica. He named his two sons from a prior marriage as the beneficiaries. When Harry died without a will, a dispute arose between his widow, Jakica, and the two sons over who was entitled to the $5,000. The community estate was worth about $7,177, and only $66 in premiums had been paid on the policy during the marriage. The district court ruled for the widow. The Nevada Supreme Court reversed and ruled for the sons. Under the law at the time, the husband managed and controlled the community property and could make a voluntary gift of part of it, as long as the gift was reasonable compared to the whole community estate and was not made with a fraudulent intent to cheat the wife out of her share. For life insurance, the court held the key question is how much community money was actually spent (the premiums), not the face value of the policy. Here, only $66 in community funds had gone to premiums, which was not unreasonable compared to the roughly $7,177 community estate, and there was no fraud. The designation of the sons as beneficiaries was therefore a valid gift, and they were entitled to the proceeds.