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Teacher's Retirement as Nonmarital Property
© 2003 National Legal Research Group, Inc.
MISSOURI: Woodson v. Woodson, 92 S.W.3d 780 (Mo. 2003) (en banc).
A state statute provides that teacher retirement benefits are not subject to equitable distribution. The statute is constitutional, and the wife's retirement benefits are nonmarital property. But the trial court properly relied on the wife's nonmarital retirement benefits as the basis for awarding the husband 60% of the marital estate.
This case involved a challenge by the husband to the constitutionality of the Missouri statute which precluded the division upon divorce of a spouse's teacher retirement benefits and an appeal by the wife of the equitable distribution of the marital property.
The trial court found that the wife's public school retirement system benefits were nondivisible, nonmarital property pursuant to Mo. Ann. Stat. 169.572. The retirement benefits were valued at $193,693 at the time of the divorce. This statutory provision precludes the division of any federal old-age, survivors, or disability pension benefits provided to any party pursuant to the federal Social Security Act (SSA), 42 U.S.C. 200 et seq., in any proceeding for a dissolution. It does allow for the division of other pension or retirement benefits but only to the same extent and in the same manner that the court may divide federal retirement benefits under the SSA. In effect, therefore, because Social Security benefits cannot be divided in a dissolution proceeding, teacher retirement benefits may not be divided as well. The husband argued that this section violated his constitutional rights to substantive due process and equal protection under the Fourteenth Amendment of the United States Constitution and Article I, 2, 10 of the Missouri Constitution.
The trial court disagreed, and the Missouri Supreme Court affirmed that ruling. In its affirming opinion, the court addressed the substantive due process claim. It looked first to the standard which governs a claim of the denial of such rights. The court recognized that the Due Process Clause provides a heightened protection against governmental interference with certain fundamental rights and interests that are present. When the government action is legislative, due process protects fundamental rights and liberties that are deeply rooted in the nation's history and implicit in the concept of ordered liberty. The husband's right to share in the wife's retirement benefits, however, was not recognized as being deeply rooted in history and tradition. The right to receive distributions of marital property upon divorce did not exist in Missouri until the 1970s and 1980s. Moreover, equitable distribution of retirement benefits was not deemed implicit in the concept of ordered liberty. In addressing the husband's claim of a denial of his right to the equal protection of the law, the court determined that because a spouse's right to receive a distribution of marital property did not
involve a suspect class (race, alienage, national origin, gender, or illegitimacy) or impinge upon a fundamental right, the standard of strict judicial scrutiny, which would require a showing that the interference was necessary to accomplish a compelling state interest, was not triggered. A statute that neither burdens a suspect class or impinges upon a fundamental right need only be rationally related to a legitimate state interest. In a rational basis review, stated the court, the social or economic policies underlying a statute are not questioned. A statutory classification is upheld if any state of facts reasonably may be conceived to justify it. Because the legislature could rationally classify teacher retirement as nonmarital property in order to attract and retain teachers and to reduce society's responsibility to support retired teachers, there was a rational basis for the statutory protection given to teacher retirement benefits in dissolution proceedings. Further evidence of the legislature's rationality is its mandate that in dividing marital property, the court shall consider all relevant factors, including the value of the nonmarital property set apart to each spouse. [Mo. Ann. Stat.] 452.330.1(3). The trial court herein specifically found that the nondivisible teacher retirement was a factor in dividing marital property.
The wife attacked the division of the marital property, which resulted in the husband receiving 60% of the marital assets. She argued that the trial court overemphasized her nonmarital teacher retirement benefits. The Missouri Supreme Court disagreed. Under Mo. Ann. Stat. 452.330.1(3), a trial court must consider nonmarital property before equitably dividing the marital property. Even so, the trial court may not consider the nonmarital property to such an extent that it has a substantial material impact on the overall division of the marital property. Here, the trial court properly considered the wife's retirement benefits as one factor in distributing the marital property. The 60%-40% split, while not equal, did not amount to an abuse of discretion.
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