In an Arizona divorce case where the parties do not have a prenuptial agreement, the spouse of an Arizona firefighter or other public safety officer has a right to receive a portion of the public safety employee’s pension benefit. When the retired public safety employee dies, however, the payment to the ex-spouse automatically terminates.

Because of the financial hardship the loss of the pension benefit imposes on the ex-spouse of a retired public safety employee who dies prematurely, it is fairly common for a divorce settlement to include maintaining a life insurance policy on the retired employee which will pay a lump-sum to the ex-spouse to compensate her for the loss of the pension benefit if the retired employee dies prematurely.

Until recently, it was believed that such a life insurance policy was something the parties could only negotiate for in a divorce settlement—something a judge would not have the legal authority to order if the case went to trial. In the Arizona Court of Appeals case Hoobler v. Hoobler (https://law.justia.com/cases/arizona/court-of-appeals-division-one-published/2022/1-ca-cv-21-0331-fc.html) published on October 6, 2022, however, the Court held that a trial judge may, in fact, order a life insurance policy to secure the payment to the non-employee spouse of her share of the pension benefit.

So what is the takeaway? If you are divorcing and you stand to receive a share of your spouse’s public safety pension benefit, you should hire an expert witness to provide testimony at trial as to the present value of the share of the pension benefit you are entitled to receive. If there are enough other marital assets to fully offset the award of the entire pension benefit to your spouse, you should pursue an award of those assets in exchange for your spouse’s keeping the pension benefit. If you can only be fully compensated by receiving a monthly share of the pension benefit, however, you should insist on a life insurance policy on your spouse’s life naming you as beneficiary, with a sufficient death benefit to fully compensate you for the pension benefit you will lose if your spouse dies prematurely.

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