## Facts

- Gregorio Madrigal, Sr. was married to Consuelo Martinez Madrigal when he obtained a group life-insurance policy through his employment.
- During the marriage, Gregorio paid additional premiums for increased coverage.
- Without Consuelo’s knowledge or consent, Gregorio designated his former spouse, Concepcion Madrigal, as the policy beneficiary.
- Gregorio died, and a dispute arose over entitlement to the policy proceeds.
- The trial court awarded Concepcion the entire proceeds as the named beneficiary.
- Consuelo appealed, asserting entitlement to her community-property share and arguing the trial court misallocated the burden of proof.

## Issues

1. Whether the beneficiary designation in favor of a former spouse constituted a gift of community property subject to a “fairness to the community” limitation and reimbursement principles.
2. Whether the burden of proof rested on the recipient of the gift (the named beneficiary) or on the surviving spouse to show the gift was fair to the community or that reimbursement was available.

## Decision

- The court of appeals reversed the trial court’s judgment and rendered judgment in favor of Consuelo.
- The court treated the designation of Concepcion as a gift of community property.
- The court held Concepcion, as donee, had the burden to prove the gift was fair to the community or that sufficient community assets existed to reimburse Consuelo.
- Because Concepcion did not carry that burden, awarding her the entire proceeds could not stand.

## Legal Principles

- Proceeds from a life-insurance policy acquired as an employment benefit during marriage are community property.
- An employment-based life-insurance policy may be sole-management community property of the employee spouse, but gratuitous transfers of community property remain subject to limits protecting the other spouse’s community interest.
- When a spouse makes a gift of community property to a third person without the other spouse’s consent, the donee must prove the gift was fair to the community or that the community estate contains sufficient assets to reimburse the nonconsenting spouse.

## Conclusion

The appellate court held that a named beneficiary’s right to proceeds from an employment-based, community-property life-insurance policy is subject to the community estate’s protections: the recipient of a nonconsensual gift must prove fairness or reimbursement, and failure to do so requires awarding the surviving spouse her community interest.


Madrigal v. Madrigal, 115 S.W.3d 32 (Tex. App.—San Antonio 2003)