As with child support, spousal support orders are most often enforced by contempt after a supporting spouse has failed to comply with the order. G.S. 50-16.7(j)(postseparation support and alimony are enforceable by civil and criminal contempt). However, G.S. 50-16.7 sets out other mechanisms that can be used as an alternative or in conjunction with contempt to enforce support orders when an obligor fails to pay. That statute also sets out several mechanisms for securing the future payment of an alimony award at the time the court orders that support be paid. Several of those mechanisms are authorized by G.S. 50-16.7(b), which states broadly that
“The court may require the supporting spouse to secure the payment of alimony or postseparation support so ordered by means of a bond, mortgage, or deed of trust, or any other means ordinarily used to secure an obligation to pay money or transfer property.”
The court of appeals recently addressed a trial court order that attempted to secure the future payment of an award by ordering the party responsible for paying alimony to maintain life insurance payable to the alimony recipient in the event of the payor’s death. In Wadworth v. Wadswoth, 868 S.E.2d 636 (N.C. App, Dec. 21, 2021), the appellate court vacated the trial court’s order, and the reasoning of the court indicates that life insurance may never be an appropriate means of securing the future payment of spousal support.
The trial court entered a child support and alimony order requiring husband to pay alimony in the amount of $1,900.00 a month for 20 years, prospective monthly child support, and an $18,026.75 child support arrearage. The court also ordered husband to maintain a life insurance policy with a $550,000.00 death benefit payable to the dependent spouse as “security for” the child support arrearage and for the alimony award. Husband appealed, arguing, among other things, that the trial court erred in ordering him to maintain the life insurance policy.
The court of appeals agreed with husband. The appellate court acknowledged that GS 50-16.7(b) allows the court to secure the payment of support but held that the life insurance ordered by the court in this case was not security within the meaning of the statute.
First, the court held that the order to maintain the life insurance policy violated the statutory requirement that the alimony obligation of husband terminate upon his death. As the life insurance would be paid only upon his death, the appellate court held that trial court order inappropriately required husband’s obligation to continue after his death.
As life insurance always is paid upon the death of the covered person, this part of the holding alone indicates that, at least according to this panel of the court of appeals, life insurance cannot be used as security for an award of support.
Second, the court reasoned that the order was in error because the amount of the life insurance policy required was more than husband’s total potential obligation for support and child support arrears. Assuming he survived the entire 20 years of the alimony award, the parties never reconciled, and the wife never remarried, husband would owe only a total of $474,026.75 for that 20-year period, an amount much lower than the required $550,000 coverage.
Finally, the court held that the life insurance policy was not security for the amount husband owed because the amount of the life insurance policy remained static throughout the 20-year term. If husband died, wife would receive $550,000, regardless of how much husband had paid before his death. The court explained that should husband pay all he owes pursuant to the court order but die the day before his last alimony payment was due, wife would receive all he had paid plus an additional $550,000 payment. The court of appeals referred to this as a “windfall” to wife, more than doubling the amount awarded to her by the trial court.
Other methods of securing the award
Income withholding and assignment of wages
G.S. 50-16.7(l1) authorizes the court to secure the future payment of alimony by ordering income withholding, and G.S. 50-16.7(b) authorizes the court to order the payor to execute an assignment of wages, salary, or other income due or to become due. See Faught v. Faught, 67 N.C. App. 37, 312 S.E.2d 504, review denied, 311 N.C. 304, 317 S.E.2d 680 (1984)(proper for court to order a supporting spouse’s military retirement pay assigned to a dependent spouse under 10 U.S.C. § 1408, the Uniform Services Former Spouses’ Protection Act); and Evans v. Evans, 111 N.C. App. 792, 434 S.E.2d 856, review denied, 335 N.C. 554, 439 S.E.2d 144 (1993)( Employee Retirement Income Security Act (ERISA)(29 U.S.C. § 1056(d)(3)(A)) and Social Security Act anti-alienation provisions do not preclude assignment of retirement and Social Security benefits to a spouse as alimony); and 42 U.S.C. § 659(a)(allowing Social Security benefits to be subject to legal process for a claim of alimony).
Bonds and Trusts
As discussed above, G.S. 50-16.7(b) broadly authorizes the court to order a supporting spouse to “secure the payment of alimony or postseparation support so ordered by means of a bond, mortgage, or deed of trust, or any other means ordinarily used to secure an obligation to pay money or transfer property.” See Parker v. Parker, 13 N.C. App. 616, 186 S.E.2d 607 (1972) (noting in dicta that requiring a bond was an appropriate method of enforcing the alimony order where defendant resided out of state and had no attorney of record); and Weaver v. Weaver, 88 N.C. App. 634, 364 S.E.2d 706 (creation of trust consisting of the real and personal property of the parties to secure payment of alimony and child support was proper exercise of discretion), review denied, 322 N.C. 330, 368 S.E.2d 875 (1988).
Liens against real property
A judgment for postseparation support or alimony can be made a lien against real property if the judgment expressly so provides, sets out the amount of the lien in a sum certain, and adequately describes the real property affected. G.S. 50-16.7(i). Execution is available for the enforcement of the lien when support is not paid, and debtor’s exemptions do not apply in the execution process. G.S. 50-16.7(k).