California Supreme Court ends divorce dispute over pension
Anyone can tell that divorce is a highly emotional process. Highly publicized divorce proceedings usually do not end with the appearance in court after the judge nullifies the union of a married couple. Residents of Orange County, California, are aware that disputes between an ex-couple can be intense, especially when it comes to settling property division, child custody and determining support obligations.
A recent Supreme Court decision about pension and divorce could be a lesson for people who are considering divorce. The case involved a pension plan that was bought with the husband’s money while they were still married. The ex-husband served four years in the Air Force prior to getting a job as a firefighter in California. While still employed as a firefighter, he got married in 1992. The husband decided to pay four years worth of credit for pre-employment public service through the California Public Employees’ Retirement System to increase his state pension in 2002. The ex-spouse used jointly owned funds of approximately $11,000 to pay for the 15-year installment plan before the couple divorced in 2008.
Because the pension had been paid with community property, the ex-wife argues that she should have a share in the pension increase. A state appeals court agreed with the claim but the state Supreme Court decided against that decision, 7-0. The court stated that although the husband used the couple’s common funds, he earned the credits while serving in the armed forces. This means that the credits are separate property and not considered marital property. The court’s decision ended with the ex-wife getting half of the premiums paid with interest.
Property division can affect the financial future of an ex-spouse. While property division aims to give fair distribution of marital assets after a failed marriage, this rule may not apply to separate properties. Divorcing or divorced couples may wish to consult their lawyers to address the issues that arise from separating marital properties. In the end, it should not be about who gets the most but about what happens after the divorce.
Source: SF Gate, “Ex-spouse loses in state court pension ruling,” Bob Egelko, June 24, 2013
