(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued February 1, 1994 -- Decided June 6, 1994
GARIBALDI, J., writing for a unanimous Court.
N.J.S.A. 2A:34-25 (section 25) requires that alimony terminate on the death of the payer spouse. In
this case, a trial court ordered Edmund Jacobitti to create a trust fund from which monthly alimony
payments would be made to his ex-wife for as long as she lives, even if Edmund predeceases her. The court
did so by invoking another part of section 25, which provides that a court may order a spouse to maintain life
insurance to protect the former spouse in the event of the payer spouse's death.
Edmund and Stella Maria Jacobitti were married in 1975 and divorced in early 1991. Edmund, at
the time of trial an eighty-seven-year-old retired physician, is in good health. Stella, nineteen years younger
than Edmund, is confined to a wheelchair as a result of the debilitating effects of multiple sclerosis.
Edmund's actual net worth is not known, however, he is a wealthy man. Stella, on the other hand, has no
independent income. Her physical condition is progressively deteriorating and, except for the $75,000 she
received in equitable distribution, Stella is completely dependent on the alimony that she will receive from
Edmund.
The trial court found that Stella was entitled to $4,200 per month in alimony. Finding that it had
statutory authority to "create a trust in circumstances where there is no certainty that the breadwinner will
continue to be able to make payments for a period of time into the future," the court ordered Edmund to
place $500,000 in trust to cover all the income to be paid to Stella each month. On Stella's death, the corpus
would be distributed to Edmund, his estate, or a designated charity. The court did provide that the corpus
could be invaded to pay Stella's monthly health-care expenses above $1,000. The trial court ordered Edmund
to create this trust fund rather than ordering him to purchase a life-insurance policy naming Stella as
beneficiary because Edmund was too old to obtain life insurance to secure continuation of Stella's alimony
payments after his death.
Edmund appealed the order to create the trust, alleging that it required him to pay alimony after his
death, which is expressly prohibited under section 25. The Appellate Division affirmed the creation of the
trust, but remanded to the trial court to amend the order to establish a trust "sufficiently funded" to secure
monthly payments of $4,200 to Stella for as long as she lives. The court further provided that unless
Edmund agreed otherwise, on Stella's death, the trust proceeds would revert to him, his heirs, or other legal
designees, but not to charity.
The Supreme Court granted certification to address the issue of the validity of the alimony-payment
trust.
HELD: Under the unique circumstances of this case, the trust set up by Edmund Jacobitti for the benefit
of his ex-wife, Stella Maria Jacobitti, is the appropriate remedy to fulfill the Legislature's intent
in authorizing life insurance for the protection of a dependent spouse "in the event of the payer
spouse's death."
1. The obligation to provide alimony, support and maintenance is personal to the paying spouse and, at common law, the paying spouse's obligation terminated on the death of either spouse. That rule, however, has been whittled away by subsequent caselaw. Because there were contradictory decisions on the propriety
of ordering a supporting spouse to purchase life insurance or to create a trust to maintain alimony payments
to the dependent spouse after the supporting spouse's death, the Legislature amended section 25. The plain
language of the amendment indicates that the Legislature intended to do two things: 1) codify the principle
that a supporting spouse's alimony obligations terminate on the death of that spouse; and 2) codify caselaw
that explicitly allowed a court to order the supporting spouse to maintain life insurance for the benefit of the
dependent spouse to protect the dependent spouse if the dependent spouse outlives the supporting spouse.
(pp. 4-9)
2. In addition, the Legislature explicitly sanctioned the use of trust funds by amending N.J.S.A. 2A:34-23 (section 23) to provide for the creation of trust funds to assure payment of reasonably foreseeable medical
and educational expenses. However, section 23, like section 25, does not specifically authorize a court to
order the creation of a trust fund to provide support after the supporting spouse dies. (pp. 9-10)
3. Neither section 25 nor section 23 as amended address whether a court may order the supporting
spouse to create a trust fund that would support the dependent spouse after the death of the paying spouse.
Thus, the Court relies on the legislative intent expressed in the 1988 amendments; the interest in protecting
former spouses is the predominant public policy underlying those amendments. The Legislature did not
intend to prohibit courts from ordering supporting spouses to create trust funds to protect dependent spouses
when the supporting spouse dies. The most plausible intention to ascribe to the Legislature in the event of
an uninsurable supporting spouse is to allow a court to order such a spouse to create a trust to protect the
dependent spouse in the event of the supporting spouse's death. That would provide the same protection for
a dependent spouse as an order requiring an insurable supporting spouse to maintain life insurance for the
benefit of the former spouse. Due to Edmund's advanced age, the self-insuring alimony payment trust is the
only reasonable solution; therefore, the court properly exercised its equitable power to create such a trust.
The trust fund replaces the statutory exception for life insurance because the need for protection is great and
life insurance is unavailable. (pp. 10-14)
Judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE WILENTZ and JUSTICES CLIFFORD, HANDLER, POLLOCK, O'HERN and
STEIN join in JUSTICE GARIBALDI's opinion.
SUPREME COURT OF NEW JERSEY
A-
81 September Term 1993
EDMUND E. JACOBITTI,
Plaintiff-Appellant,
v.
STELLA MARIA JACOBITTI,
Defendant-Respondent.
___________________________
Argued February l, l994 -- Decided June 6, 1994
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
263 N.J. Super. 609 (l993).
Albert L. Cohn argued the cause for appellant
(Cohn, Lifland, Pearlman, Herrmann & Knopf,
attorneys; Mr. Cohn and Terri Del Greco, of
counsel and on the briefs).
Gail J. Mitchell argued the cause for
respondent (Schwartz & Barkin, attorneys; Ms.
Mitchell and Allen J. Barkin, on the briefs).
The opinion of the Court was delivered by
GARIBALDI, J.
N.J.S.A. 2A:34-25 provides that "[a]limony shall terminate on the death of the payer spouse." In this case a trial court ordered a divorced man to create a trust fund from which monthly alimony payments would be made to his ex-wife so long as she lives, even if she outlives her ex-husband. The court did so by
invoking another part of N.J.S.A. 2A:34-25, which provides that a
court may order a spouse to maintain life insurance to protect
the former spouse "in the event of the payer spouse's death."
Plaintiff, Edmund E. Jacobitti, asserts that the court was
statutorily barred from ordering the creation of the trust. We
hold that under the specific facts of this case, it was not.
Edmund and Stella Marie Jacobitti were married in l975 and divorced in early l99l. At trial, Edmund, a retired physician, was in apparent good health despite his eighty-seven years. Stella, nineteen years younger than Edmund, however, was confined to a wheelchair due to the debilitating effects of multiple sclerosis.
Although Edmund's precise net worth is not known, he is unquestionably wealthy. In an ante-nuptial agreement executed in l975, Edmund represented that he had assets in excess of $l,325,000 and an annual income in excess of $l00,000. The trial court, however, determined that when the agreement had been executed, Edmund had failed to make complete disclosure of his net worth; it therefore found the ante-nuptial agreement to be unconscionable and unenforceable. Stella asserts that at the time of the trial, Edmund was worth six- to nine-million dollars and had an annual income in excess of $300,000. To avoid disclosure of his wealth at trial, Edmund's counsel stipulated that Edmund had the "capacity financially to make any payment for support or alimony that the court may reasonably fix."
Stella, on the other hand, is impecunious. Her physical
condition is progressively deteriorating. Except for the $75,000
she received in equitable distribution, Stella is totally
dependent on the alimony that she will receive from Edmund.
The trial court found that Stella was entitled to $4,200 per
month in alimony. Finding that it had statutory authority "to
create trusts in circumstances where there is no certainty that
the breadwinner will continue to be able to make payments for a
period of time into the future," the court ordered Edmund to
place $500,000 in trust to cover all the income to be paid to
Stella each month. On Stella's death, the corpus would be
distributed to Edmund, his estate, or a designated charity. The
court provided, however, that the corpus could be invaded to pay
Stella's monthly health-care expenses that exceeded $l,000.
Because of Edmund's advanced age, the trial court ordered
Edmund to create the trust rather than ordering Edmund to
purchase a life-insurance policy naming Stella as the
beneficiary. As the Appellate Division noted, the then-eighty-seven-year old Edmund was "undoubtedly too old to obtain life
insurance to secure continuation of defendant's alimony payments
after death." Thus, the trust was a more effective alternative.
Edmund appealed the order to create the trust, alleging that
it required him to pay alimony after his death, which is
expressly prohibited under N.J.S.A. 2A:34-25. The Appellate
Division affirmed the creation of the trust, but remanded to the
trial court to amend the order to establish a trust "sufficiently
funded" to secure monthly payments of $4,200 to Stella for as
long as she lives.
263 N.J. Super. 608, 6l5 (l993). It further
provided that unless Edmund agreed otherwise, on Stella's death
the trust proceeds would revert to him, his heirs, or other legal
designees, but not to charity. Id. at 6l7.
Both parties petitioned for certification. We granted only
Edmund's petition, ___ N.J. ___ (l993), limited to the "issue of
the validity of the alimony-payment trust."
We now hold that under the unique circumstances of this
case, Jacobitti's trust is the appropriate equitable remedy to
fulfill the Legislature's intent in authorizing life insurance
for the protection of a dependent spouse "in the event of the
payer spouse's death." See N.J.S.A. 2A:34-25.
Alimony is an allowance for support and maintenance that, traditionally, a "husband is required to supply to his wife when she is living separate and apart or has been divorced from him." Davis v. Davis, l 84 N.J. Super. 430, 436 (App. Div. l982). Certainly the traditional roles of husband as bread-winner and wife as dependent no longer apply in every divorce situation, but they do apply to the Jacobittis. The supporting party pays alimony in substitution for the duty of marital support. Ibid.
In New Jersey, courts enter alimony orders pursuant to
N.J.S.A. 2A:34-23, which before the l988 amendments provided in
pertinent part:
The court may make such order as to the
alimony on maintenance of the parties, and
also as to the care, custody, education and
maintenance of the children, or any of them,
as the circumstances of the parties and the
nature of the case shall render fit,
reasonable and just, and require reasonable
security for the due observance of such
orders.
By authorizing a court to order alimony whenever "fit, reasonable
and just," and to require reasonable security for the enforcement
of those orders, the Legislature gave courts substantial
discretion in determining whether to grant alimony and in setting
the amount and form in which to grant it. Carr v. Carr, l
20 N.J. 336, 35l (l990). Courts are to apply the "comprehensive" terms
of N.J.S.A. 2A:34-23 liberally and equitably. Grotsky v.
Grotsky,
58 N.J. 354, 36l (l97l).
The obligation to provide alimony support and maintenance is
personal to the paying spouse, and at common law the paying
spouse's obligation terminated on the death of either spouse.
Ibid.; L.I. Reiser, Annotation, Death of Husband as Affecting
Alimony,
39 A.L.R.2d l406 (l955). That principle -- that alimony
ended at the death of the payor -- was reflected in Modell v.
Modell,
23 N.J. Super. 60 (l952). There, the Appellate Division
reviewed a decision by the trial court that forced the paying
spouse "to create a fund for the support and maintenance" of the
dependent spouse in case the paying spouse died first. Id. at
62. Specifically, the order required the paying spouse to make
the dependent spouse a beneficiary of a life-insurance policy.
Ibid. The Appellate Division, in one brief paragraph, held that
the trial court had erred in entering its order because "[t]he
death of either the husband or the wife terminates the husband's
obligation to support the wife." Ibid.
Modell, however, has been whittled away by subsequent case
law. In Capodanno v. Capodanno, 58 N.J. ll3 (l97l); Khalaf v.
Khalaf,
58 N.J. 63 (l97l); and Martindell v. Martindell, 2l N.J.
34l (l956), the Court held that courts may make alimony orders in
amounts large enough to enable a dependent spouse to accumulate
savings on which to draw income should the paying spouse
predecease the dependent spouse. Those allowances were made so
that the dependent spouse might "protect herself against the day
when alimony payments may cease." Khalaf, supra, 58 N.J. at 70.
In Grotsky, supra, 58 N.J. at 36l, we further eroded the
common-law Modell approach. The Grotsky Court upheld an order
under N.J.S.A. 2A:34-23 that directed the father to maintain his
life insurance and name his minor children as beneficiaries, "for
the purpose of securing due fulfillment of the support order
during their minority." Id. at 36l. Later, the Court relied on
Grotsky in Meerwarth v. Meerwarth, 7l N.J. 54l (l976), to
"conclude that a trial court, in appropriate circumstances and
for good cause shown, could order a [paying spouse] to cooperate
in obtaining [life] insurance . . . for the financial protection
of [the dependent spouse and any children] . . . ." Id. at 544.
The Court cited N.J.S.A. 2A:34-23 as the source of that equitable
power in direct contradiction to Modell, supra. But the Court
ultimately held that the trial court had correctly declined to
order the paying spouse to submit to the physical examination
required to obtain a life-insurance policy because the supporting
spouse's privacy interest outweighed the interest in protecting
the dependent spouse. Ibid.
Finally, in l982, the Appellate Division decided Davis,
supra, l
84 N.J. Super. 430, a case strikingly similar to the
instant matter. Mrs. Davis was legally blind due to progressive
degenerative retinitis pigmentosa and also suffered from advanced
arteriosclerosis. She did not receive a distributive share of
the marital assets in the divorce; she was unable to work; and
except for a small amount of her own investment income, she was
completely dependent on her alimony. Ibid. Mr. Davis, however,
had substantial assets and income that could easily provide for
the continuation of his alimony payments should he predecease
Mrs. Davis. Ibid.
The Appellate Division held that in the unique circumstances
of the Davises' case, "equity crie[d] out for some relief."
Therefore, the trial court's requirement that Mr. Davis obtain
life insurance "or create a trust fund to guarantee future
alimony payments" was appropriate and "plainly within the broad
authority" of N.J.S.A. 2A:34-23. Ibid. With regard to Modell,
supra, the Appellate Division stated that "its viability had been
undercut by later Supreme Court decisions" and that it relied on
the application of the equitable power of the courts recognized
in those cases to enter its decision. Id. at 437, 439.
In the face of the contradictory decisions on the propriety of ordering a supporting spouse to purchase life insurance or to create a trust to maintain alimony payments to the dependent spouse after the supporting spouse's death, the Legislature amended N.J.S.A. 2A:34-25. L. l988, c. l53, § 7. That amendment added the following language to the statute:
Alimony shall terminate upon the death of the payer spouse, except that any arrearages that have accrued prior to the date of the payer spouse's death shall not be vacated or annulled.
Nothing in this act shall be construed to
prohibit a court from ordering either spouse
to maintain life insurance for the protection
of the former spouse or the children of the
marriage in the event of the payer spouse's
death.
[Emphasis added.]
The legislative history of that amendment is non-existent
except for the following comment from the Senate Judiciary
Committee Statement to Senate Bill No. 976, which reiterates that
the amendment "[p]rovides that the court may order a spouse to
maintain life insurance for the protection of the former spouse
or any children." Senate Judiciary Committee, Statement to
Senate Bill No. 976 3 (l988).
The plain language of that amendment indicates that the
Legislature intended to do two somewhat incongruous things.
First, the Legislature codified the principle relied on by the
Modell court that a supporting spouse's alimony obligations
terminate on the death of that spouse. Second, the Legislature
rejected the result in Modell and codified at least a portion of
Davis by explicitly allowing a court to order the supporting
spouse to maintain life insurance for the benefit of the
dependent spouse to protect the dependent spouse if the dependent
spouse outlives the supporting spouse.
Although the Davis court had also explicitly sanctioned the
use of trust funds to support the dependent spouse after the
supporting spouse's death, the Legislature did not specifically
sanction their use in its l988 amendment. The Legislature did,
however, explicitly sanction the use of trust funds in another
context. In l988, the Legislature amended N.J.S.A. 2A:34-23 so
that the provision now reads:
the court may make such order as to the
alimony or maintenance of the parties, and
also as to the care, custody, education and
maintenance of the children, or any of them,
as the circumstances of the parties and the
nature of the case shall render fit,
reasonable and just, and require reasonable
security for the due observance of such
orders, including, but not limited to, the
creation of trusts or other security devices,
to assure payment of reasonably foreseeable
medical and educational expenses.
That amendment explicitly sanctions the use of trust funds
for the limited purpose of securing the payment of medical and
educational expenses. However, it does not authorize a court to
order the creation of a trust fund to provide support after the
supporting spouse dies.
Neither of the two relevant l988 amendments addresses the
issue in this case: whether a court may order the supporting
spouse to create a trust fund that would support the dependent
spouse after the death of the paying spouse. Plaintiff argues,
first, that the trust constitutes post-mortem alimony, which is
prohibited under N.J.S.A. 2A:34-25, and, second, that the
Legislature enacted the second paragraph of that provision to
provide for the payment of only accumulated alimony arrearages
due at the death of the payer spouse. Defendant argues that the
trust does not constitute post-mortem alimony because it will be
fully funded prior to Edmund's death and that Edmund's
"arrearages" argument makes no sense. We do not decide this case
on the resolution of either of those issues.
Instead, we rely on the legislative intent expressed in the
l988 amendments to N.J.S.A. 2A:34-23 and N.J.S.A. 2A:34-25. We
agree with Edmund Jacobitti that if the Legislature had wanted to
include alimony-payment trusts in the life-insurance exception to
N.J.S.A. 2A:34-25, it could easily have done so. Nonetheless,
the Legislature in both its l988 amendments to N.J.S.A. 2A:34-23
and N.J.S.A. 2A:34-25 expressed its interest in protecting former
spouses. We find that interest to be the predominant public
policy underlying the Legislature's l988 amendments.
"Generally, a court's duty in construing a statute is to
determine the intent of the Legislature." AMN, Inc. v. Township
of S. Brunswick Rent Levelling Bd.,
93 N.J. 5l8, 525 (l983). In
construing a statute, a court should "`effectuate the legislative
intent in light of the language used and the objectives sought to
be achieved.'" Merin v. Maglaki, l
26 N.J. 430, 435 (l992)
(quoting State v. Maguire,
84 N.J. 508, 5l4 (l980)) (emphasis
supplied). An examination of the objectives of the l988
amendments indicates that the Legislature did not intend to
prohibit courts from ordering supporting spouses to create trust
funds to protect dependent spouses when the supporting spouses
die.
The Legislature indicated that that support could not take
the form of alimony payments after the death of the payer spouse.
Nevertheless, the Legislature indicated with equal clarity that a
court could provide for the support of the dependent spouse after
the death of the supporting spouse by ordering the supporting
spouse to name the dependent spouse as the beneficiary of a life
insurance policy.
The most plausible intention to ascribe to the Legislature
in the event of an uninsurable supporting spouse is to allow a
court to order such a spouse to create a trust to protect the
dependent spouse in the event of that spouse's death. That
device would achieve the same protection for a dependent spouse
as an order requiring an insurable supporting spouse to maintain
life insurance for the benefit of the former spouse.
The creation of trusts certainly is not unprecedented in the
context of family law. N.J.S.A. 2A:34-23 provides that the court
may require reasonable security for the due observance of
alimony, including the creation of trusts to assure payment of
reasonably-foreseeable medical and educational expenses. That
the trial court could have ordered Edmund to create a trust to
assure during his lifetime the payment of Stella's very
foreseeable medical expenses is therefore undisputed. Similarly,
the court could have ordered Edmund to maintain life insurance to
protect Stella from becoming a public charge in the event that
Edmund were to predecease her. The lower court's failure to
follow N.J.S.A. 2A:34-25 to the letter is not fatal to the trial
court's order that Edmund create the trust.
Stella is one of the persons that the Legislature intended
to protect. However, life insurance for the now-ninety-year-old
Edmund, if available at all, would carry such a high premium that
it is virtually not an option. A self-insuring alimony payment
trust is the only reasonable solution for the Jacobittis.
This case is analogous to Carr, supra, l
20 N.J. 336. Mrs.
Carr was caught between two statutes, inasmuch as the lower
courts concluded that she was entitled to neither a statutory
equitable distribution under the divorce laws nor a statutory
elective share under the probate code. Id. at 340. She was in
the process of divorcing her husband when he died. The court
found that she was barred from receiving equitable distribution
of the marital assets because the divorce proceeding abated on
the death of her husband. However, because the Carrs were not
living together as husband and wife, she was not entitled to a
surviving spouse's statutory elective-share of her deceased
husband's estate. Id. at 345-46.
In Carr we recognized the strong public policy that marital
assets are the joint property of both spouses. We searched the
statutory scheme for any firm indication that the Legislature had
expressed a contrary intention. Finding none, we exercised our
equitable power by imposing a constructive trust that
"effectuat[ed] sound public policy and mold[ed] the law to embody
the societal values that are exemplified by such public policy."
Id. at 350. That constructive trust prevented Mrs. Carr from
forfeiting what was legitimately hers.
Here, too, the Court should properly exercise its equitable
power to protect Stella from the insurance problem caused by her
former husband's advanced age. Stella's total dependency on
Edmund's alimony payments and her progressively-debilitating
physical condition emphasize the need that some relief be
fashioned to protect her if Edmund predeceases her. But for her
husband's advanced age, a court could have ordered the purchase
of life insurance, which is specifically permitted under N.J.S.A.
2A:34-25, to secure her rights.
Our decision today affords her that protection, but only because of the fact that Edmund is too old to obtain life insurance. The trust fund in this case therefore replaces the statutory exception for life insurance because the need for protection is great and life insurance is unavailable. This case presents us with a classic example of what the Legislature sought to avoid when it enacted the life insurance statute: an ex-spouse who would be penniless but for alimony. In its perceptive assessment of the facts and its order of the creation of the trust, the trial court eliminated the otherwise-certain outcome that the dependent ex-spouse would become a public charge. To eradicate that turn of events, the trial court properly ordered the creation of the trust for the purpose of continuing alimony payments for the life of the dependent spouse in the event that he predeceases her.
We affirm the judgment of the Appellate Division.
Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, and Stein join in this opinion.