If you are thinking about marrying a divorcee, you may want to read the fine print on your fiancee's divorce decree, as you never know how his or her past might impact your finances.
In Kircher v. Kircher, a recent case decided by a California Court of Appeal, it was held that a decedent's second wife was personally liable to his first wife for continuing spousal support payments up to Fair Market Value of real property (including joint tenancy property) he and the second wife held at time of his death.
In 1976 Mr. Kircher and his first wife executed a Mandatory Settlement Agreement as part of their Dissolution of Marriage. In 1987, Mr. Kircher and his first wife filed a Stipulation and Order that modified the original agreement. The language of the new Stipulation and Order provided that Mr. Kircher would pay his first wife $2,000 per month and continuing thereafter until her death or until she remarried or was found living with a member of the opposite sex for more than 30 consecutive months. The Stipulation did not provide for the termination of spousal support upon Mr. Kircher's death, which is a typical order that is made in divorce cases. In other words, the order implied that Mr. Kircher's estate would have to continue paying his first wife spousal support.
During Mr. Kircher's marriage to his second wife, he transferred title in three properties to himself and his second wife as "joint tenants." Mr. Kircher died in 2005, at which time his first wife filed suit against his second wife personally and in her capacity as Executor of the Mr. Kircher's Will, asserting that she had breached the terms of the 1987 Stipulation.
At trial, the Court held that Mr. Kircher's second wife was obligated to continue to follow the terms of the 1987 Stipulation up to the fair market value of the property she received through Husband's will that was passed to her without formal administration - i.e., probate. The second wife appealed the trial court's decision, but the Court of Appeal affirmed.
On appeal Mr. Kircher's second wife argued that since the property in question was held in joint tenancy it could not be reached under Section 11351 of the Probate Code. The appellate court disagreed, however, holding that under Section 13550 of the Probate Code, a surviving spouse is personally liable for the debts of the deceased spouse chargeable against the property she receives up to the fair market value at the date of the decedent's death, less the amount of any liens and encumbrances, of the total of the following: a) the portion of the one-half of the community and quasi-community property belonging to the surviving spouse, b) the portion of the one-half of the community and quasi-community property belonging to the decedent that passes to the surviving spouse without administration.
In review of this decision, it is clear that Mr. Kircher entered into a bone headed agreement with his first wife concerning the duration of his spousal support obligation. He should have considered the fact that his second wife would suffer the consequences of his decision. In conclusion, this case stands for the strong argument that one should scrutinize the terms of a fiancee's divorce decree before getting married.