Saturday, July 12, 2008

Property Division: Vesting Rights

Pensions, real estate may or may not be property because the supposed owner has no vested rights in the property. The following are some Indiana cases dealing with vesting of property.

IN RE THE MARRIAGE OF ELKINS (Indiana Court of Appeals, 2002; text version):

"Pursuant to Ind. Code Ann. § 31-9-2-98(b)(2) (West 1998), a vested pension is included as part of the marital pot and subject to division. Diana does not contend that the pension was entirely unvested and therefore not includable as marital property. Rather, she contends that only a portion of the pension was vested at the time she filed her petition, and that only that portion should have been included as marital property subject to division.

The relevant facts are that, when she filed for dissolution, Diana was three months short of thirty years of service for her employer. Had she terminated employment at that time, her monthly pension, when she became eligible to draw it, would have been $1,165.73. With the attainment of thirty years service three months later, the value of her pension almost doubled, to $2,300. She claims that the trial court erred in including the increase in her pension as marital property.

Ind. Code Ann. § 31-15-7-4(a)(1)-(3) (West 1998) empowers courts to dispose of the following three classifications of property of the parties: Property owned by either spouse prior to the marriage; property acquired by either spouse in his or her own right after the"
IN RE THE MARRIAGE OF MECHELLE K. MOYARS (717 N.E.2d 976 (Ind. App. 1999):
Vested future interests in land are analogous to vested pension benefits. In Schueneman v. Schueneman, 591 N.E.2d 603 (Ind. Ct. App. 1992), this court examined the issue of whether pension benefits are a marital asset subject to division by the dissolution court. We held that if such benefits are vested, they are a marital asset. Implicit in this holding was the premise that if the right to such benefits is fixed, such benefits are a valuable asset even though there is no present right to receive income. If such rights are not forfeited upon termination, they were secured during the marriage through the efforts of the parties. Thus, they are subject to division. Id. at 608.

Likewise, here, although David may not take legal possession of the land for a number of years, his right to do so at some point in the future is fixed and certain. He received this property under his father's will. David's father died, and David received his inheritance during his marriage to Mechelle. Simply because his present interest is less than a fee simple does not render it too remote to be part of the marital estate. If David and Mechelle had purchased such an interest during their marriage, there would be no difficulty in determining that the interest was a marital asset. The fact that the interest was acquired through inheritance should not change this analysis. See Chase v. Chase, 690 N.E.2d 753, 756 (Ind. Ct. App. 1998) (assets received through inheritance or gift during the marriage are marital assets). Therefore, we see no reason why David's interest should not be considered a marital asset.
Disability pensions, workmen compensation payments also raised questions about whether the money belonged in marital pot or not.

Antonacopulos v. Antonacopulos, 753 N.E.2d 759 (Ind. Ct. App. 2001)(html format):
As his only claim of error, Nick contends that the trial court erred by including in the parties’ marital assets his disability pension. Specifically, Nick asserts that no marital assets were used to purchase his disability pension and that the disability pension payments were designed to compensate him for lost future income; therefore, he argues, the disability pension should not be included in the marital estate.


Here, similar to the husband in Jendreas, Nick made no monthly payments (i.e., used no marital assets) toward his pension plan. Therefore, the family was not deprived of the use of any funds to establish or maintain the plan. A review of the record discloses that both Nick and Rose testified to this fact at the hearing. Moreover, as exhibited by a letter from Nick’s previous employer, the pension Nick receives is a permanent incapacity (disability) pension that requires no contributions from the participants. Thus, Nick’s pension payments can be characterized as payments intended to compensate him for lost future earnings. Based upon these factors, we conclude, as we did in Jendreas, that Nick’s disability pension payments are similar to worker’s compensation benefits and should, therefore, be excluded from the marital assets and ensuing property division.
Other cases: Hayden v. Hayden (Ind. App. 2003; html format) (Tier II Railroad disability benefits); and Jendreas v. Jendreas, 664 NE2d 367 (Ind. Ct. App. 1996) (social security disability and disability under a union pension), Leisure v. Leisure, 605 N.E.2d 755 (Ind. 1993) (Workmen compensation benefits). The last two are not on the Indiana Appellate Court onsite archives)

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