Carr v. Carr – Survivor Benefit is Marital Asset, Indiana Appeals Court Rules

A survivor benefit plan of a military pension should be included in the “marital pot” when considering what should be calculated as an “asset” in an Indiana divorce.

That was the ruling handed down by the Indiana Court of Appeals in the recent case of In Re: the Marriage of Carr v. Carr.

This was a couple who had been married for 16 years and had two children together when the husband sought a divorce. For 14 years before the pair were married, husband had worked in the military, and his service continued while the pair were together. Prior to their marriage, the husband had begun building up his pension. During the marriage, that pension grew. He’d also earned a pension prior to the marriage from a private company.more

While the two were married, both made substantial contributions to the acquisition of marital assets, though husband’s contributions were more financial while wife’s were more non-economic.

Husband filed for divorce in Indiana while he was deployed overseas. He expected when he returned to leave the military and find a job that paid less, but his earning capacity still far outpaced his soon-to-be-ex-wife’s.

The pair agreed on most issues – including the parenting time schedule with the kids. However, they could not agree over the value and treatment of husband’s civilian and military pensions. An expert was hired to calculate the value of these assets. He determined the survivor benefit wife would earn if husband died was $2,750 a month or $226,500 total. The total amount that could be earned under the pension was $1.2 million.

Wife countered this by pointing out that her non-economic contributions to the marriage allowed her husband to stay in the military and if he’d not been able to do so, he would have no pension. She stated she counseled him to maximize his retirement benefits, and therefore she should be entitled to half of the $1.2 million.

Wife received half of the total military pension’s present value, which was $315,500.

There was dispute between parties about whether this should be considered a “marital asset.” If it was, wife would be entitled to fewer other assets in an equitable distribution arrangement. Wife pointed out – and trial court agreed – there was no guarantee she would ever collect survivors’ benefits because she would have to live longer than him to do so. Accordingly, the court didn’t count the survivor benefits as a marital asset. Ultimately, she was awarded more than $800,000 of a total marital estate of more than $1.3 million.

Husband appealed, arguing the survivor benefit plan should have been counted as a marital asset.

The appellate court agreed. Justices noted that actually, this benefit to the other spouse because it creates an incentive for the pension-earner to secure a survivor benefit plan in the first place.

The court ordered that the case be remanded to the trial court to either justify the 65/35 split of assets, or to conform it to the 60/40 split that resulted when the survivor benefit plan was added to the marital pot for distribution of assets.

Indiana Family Law Attorney Burton A. Padove handles divorce and child custody matters throughout northern Indiana, including Gary and Hammond.

Additional Resources:

In Re: the Marriage of Carr v. Carr , Jan. 27, 2016, Indiana Court of Appeals

More Blog Entries:

Gertiser v. Gertiser – Indiana Supreme Court Weighs Spousal Maintenance, Dec. 20, 2016, Hammond Divorce Lawyer Blog