Oral Argument Preview: Are Unvested Military Retirement Benefits Marital Property Subject to Division in a Divorce? Christen M. Daniel v. Sean M. Daniel.

Update: On March 26, 2014, the Supreme Court handed down a merit decision in this case.  Read the analysis here.

Read the analysis of the oral argument here.

On October 22, 2013, the Supreme Court of Ohio will hear oral argument in the case of Christen M. Daniel v. Sean M. Daniel, 2012 -2113. The issue before the Court is whether unvested military retirement benefits are marital assets subject to division in divorce proceedings. Because Appellee Sean Daniel did not file a merit brief, he will not be permitted to participate at oral argument.

Case Background

The parties, Plaintiff-Appellant Christen and Defendant-Appellee Sean, were married in 1995. Just prior to the parties’ marriage, Sean enlisted in the Ohio National Guard. By the time of the divorce hearing, Sean had accumulated sixteen years of retirement benefits credit due to his military service with the Guard, all during the course of the marriage. He had also re-enlisted for an additional six years of military service. He will be eligible to receive retirement benefits once he has accumulated twenty years of military service credit.

The magistrate who heard the case ruled that since Sean’s retirement benefits had not vested, there were no retirement benefits to divide. The trial court agreed with the magistrate, and the divorce decree was entered.

In a split decision, while acknowledging a split of authority over the question of whether an unvested military pension may be considered in the equitable division of property,  the Third District Court of Appeals found no abuse of discretion in the decision not to include Sean’s unvested pension as a marital asset. The dissent would find that the portion of the retirement benefit attributable to the years of the marriage should be deemed marital property subject to division.

Key Precedent and Statutes

RC 3015.171 – provides for the division of property in a divorce.

Holcomb v. Holcomb, 44 Ohio St.3d 128 (1989) – A vested monthly pension benefit is payment for past services, and if the services were rendered during the marriage, it constitutes a marital asset.

Hoyt v. Hoyt, 53 Ohio St. 3d 177 (1990) – when considering a fair and equitable distribution of pension or retirement benefits in a divorce, the trial court should attempt to preserve the asset in order that each party can procure the most benefits and should attempt to disentangle the parties’ economic partnership so as to create a conclusion and finality to their marriage.

Lemon v. Lemon, 42 Ohio App. 3d 142 (4th dist. 1988) – the Fourth District Court of Appeals found that Husband’s unvested pension plan was a marital asset. The trial court should had considered the time left before the pension became vested, the length of the marriage, and the contributions of the parties, both primarily and secondarily, to the pension plan.

Wilson v. Wilson, 2008-Ohio-3195 (9th Dist.) – Husband’s unvested pension accrued during the marriage was a marital asset, subject to equitable division.

Christen Daniel’s Argument

Christen argues that an equitable division of assets would include Sean’s military benefits. Because Sean had served sixteen of the requisite twenty years prior to the divorce hearing, a portion of the unvested military retirement benefits should be considered marital. To totally divest Christen of any expectancy of retirement benefits, 80% of which were accumulated during the marriage, would be unconscionable and an abuse of discretion. Otherwise, she argues, one spouse will receive all of the benefits accrued during the marriage, while the other spouse receives nothing. When a party receives retirement benefits that were unvested at the time of the divorce but that vest at a later date, he or she is receiving compensation earned during the marriage.

While acknowledging that Sean’s benefits had not yet vested by the time of the divorce hearing, Christen argued that Sean had already re-enlisted for an additional six-year term, meaning that during the marriage he contractually committed to more than twenty years of military service; therefore, the benefits will certainly vest. If Sean’s benefits never vest (for example, if he is dishonorably discharged from service), there would be no harm done and nothing to divide. Simply put, if the retirement benefits never vest, neither party would get anything.  But if they do, the portion attributable to the sixteen years accumulated during the marriage would be subject to equitable distribution.

Christen urges the Supreme Court to follow the Third District’s dissenting opinion and find that military retirement benefits accumulated during a marriage, whether vested or unvested, are marital assets subject to division in a divorce. Unvested benefits should be divided using a formula based on the proportion of the benefits earned during the marriage.

Christen Daniel’s Proposed Proposition of Law

Unvested military retirement benefits are marital assets, subject to division in divorce proceedings.

Student Contributor: Elizabeth Chesnut

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