Character mistake: The Fifth Amendment Double Jeopardy Clause does not apply. Libby could be convicted of 1st Degree murder when she gets out and pursues Nick. It doesn't really matter to the plot, however, because it was what Libby believed to be true and motivated her. Further, she ends up shooting Nick in self-defense. So it's all good.
Double Jeopardy (1999)
1 character mistake - chronological order
Directed by: Bruce Beresford
Starring: Tommy Lee Jones, Bruce Campbell, Bruce Greenwood, Ashley Judd
Factual error: Ashley Judd is convicted of murdering her husband for the insurance money and that would make it a first degree murder charge (first degree meaning she planned the murder). Because of that there is no way she would have been eligible for parole after just 6 or 7 years.
Question: Why did the ex husband kill his former mistress turned wife?
Answer: Nick used Angie to help fake his death, frame Libby, and collect the insurance money which would have gone to their son, Matty. It's unclear if Nick married Angie, who became Matty's legal guardian, but he needed her to gain access to the money. He certainly didn't love her, and once he fully controlled the money, he eliminated her, as she was a liability who could have exposed him. I agree with the other answer that it also simplifies the plot by killing off a secondary character. It also shows how devious, ruthless, and sociopathic Nick is.
Answer: I don't think they explained it, but most likely for her insurance money which is the same reason Nick faked his death in the first place. But it's also possible her death was faked as well. Looking at it from the prospective of the writer, it seemed it was easier to kill her off or get rid of her somehow instead of her showing up at the end with Nick and there wouldn't be a way for Libby to kill her without facing jail time for it and it wouldn't make sense for Libby to just forgive her and let her go.
Angie's death wasn't faked. It was established and verified by the next-door-neighbor lady that she was killed in the house explosion while Nick and Maddy were conveniently away. Libby also researched old newspaper articles about the accident and the ensuing investigation. The articles also showed photos of the now-dead Angie.
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Suggested correction: It's never stated that she was charged with 1st degree murder, nor that she killed her husband for the insurance money. It was only brought up in trial as motive. Nick's accident was ruled "wrongful death" and the fact she did get paroled further show she was never convicted of 1st degree murder.
And what about the phone call from prison the Libby makes to Angie, and Angie says she "was just about to call her" or she tried calling her like how the heck can you call someone in prison!?