Background
Kate and William Pace’s 2016 divorce judgment incorporated a property-settlement agreement requiring William to maintain $1 million in life insurance—$250,000 for each of their four children—with the children as irrevocable beneficiaries and Kate as trustee. After William died in 2022, Kate learned that he had maintained only $500,000 in coverage, had designated a newly created insurance trust rather than the children as beneficiary, and had named his brother Tom as trustee instead of Kate.
Kate filed a claim in William’s estate seeking, among other relief, full funding and modification or reformation of the trust to appoint her as trustee. The estate paid another $500,000 for the children, bringing their total benefit to $1 million. The chancery court then ruled that William’s obligation had been fully satisfied and canceled Kate’s claim, even though Kate had not received the control over the funds required by the divorce judgment.
The Court’s Holding
The Court of Appeals first held that it had jurisdiction. Although William’s estate remained open, the order was final and appealable because it fully resolved and canceled Kate’s claims against the estate.
On the merits, the court held that payment of the monetary shortfall did not fully remedy William’s violations of the divorce judgment. The incorporated property-settlement agreement was a court order—not merely a private contract—and it required both $1 million for the children and Kate’s appointment as trustee. Because the chancery court addressed the underfunding but left Kate without the required control over the funds, its finding that her claim was fully satisfied was manifestly erroneous. The court reversed and remanded for the chancellor to fashion a remedy, leaving to the chancellor’s discretion whether to impose a constructive trust or substitute Kate as trustee of the insurance trust. It also directed the chancery court to address attorney’s fees on remand.
Key Takeaways
- An order finally resolving a probate claim is appealable even when administration of the estate continues.
- A property-settlement agreement incorporated into a Mississippi divorce judgment is a court order, and an action seeking compliance enforces that judgment rather than merely asserting breach of contract.
- Paying the required amount did not cure the separate violation of denying Kate the trustee authority expressly granted by the divorce judgment.
Why It Matters
The decision confirms that courts must enforce the nonmonetary as well as monetary terms of an incorporated divorce agreement. An estate cannot establish full compliance merely by supplying missing funds when the judgment also specifies who must control those funds.
The ruling does not itself appoint Kate as trustee. It requires the chancery court on remand to select an equitable remedy for her lack of control and to consider the agreement’s attorney-fee provision.