Tonya A. Andrews, Administrator For The Estate of James Christopher Sprinkle

The sole issue in this action by a decedent’s estate to set aside a fraudulent conveyance in order to execute on a monetary judgment is whether life insurance proceeds paid to the decedent’s surviving spouse are exempt from claims of a creditor of the surviving spouse. The unusual twist in this matter is that the creditor is the estate of the surviving spouse’s deceased husband. Following the husband’s death and the appointment of the decedent’s mother as the Administrator of his estate, the estate obtained a judgment against the surviving spouse for conversion of the decedent’s separate assets soon after his death. After obtaining the judgment against the surviving spouse in a separate action, the estate commenced this action to satisfy the judgment by executing on real property that the surviving spouse acquired after her husband’s death and subsequently conveyed to her sister-in-law for no consideration. The trial court set aside the conveyance of the real property as fraudulent and authorized the estate to “levy execution against the real property to the extent necessary to satisfy the judgment.” The surviving spouse does not appeal the fraudulent conveyance ruling; instead, she contends the real estate is immune from the estate’s claim because she used life insurance proceeds to purchase the real estate, and proceeds from a life insurance policy are immune from the claims of the estate’s creditors pursuant to Tenn. Code Ann. § 56-7-202 and Tenn. Code Ann. § 56-7-203. The trial court found the surviving spouse’s reliance on the statutes to be misplaced because the statutes exempt life insurance proceeds payable to the surviving spouse or children from claims of “the decedent’s creditors,” not from creditors of the surviving spouse. We affirm. We also find that the appeal is frivolous and remand so the trial court may award just damages pursuant to Tenn. Code Ann. § 27-1-122.