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SOCIAL SECURITY BENEFITS--ROLE IN PROPERTY DISTRIBUTION
© 1999 National Legal Research Group, Inc.
WASHINGTON: In re Marriage of Zahm, ___ Wash. 2d ___, 978 P.2d 498 (1999).
A spouse's Social Security benefits may not be divided in divorce proceedings but may be considered as part of the spouses' economic circumstances for the purpose of dividing other assets.
In a case of first impression in the state, the Washington Supreme Court held that trial courts in divorce proceedings need not close their eyes to a spouse's receipt of Social Security benefits, although the benefits themselves cannot be valued and divided either directly or through an offsetting award.
At the time of trial in the parties' marriage dissolution proceeding, the husband was receiving various monthly payments, including Social Security benefits. The trial court characterized the Social Security benefits as community property, although it did not calculate a future value for these benefits as part of the property distribution.
The husband appealed the trial court's decision.
The Washington Court of Appeals agreed with the husband that it was improper for the trial court to characterize the Social Security benefits as community property, but it found the error to be harmless.
The Washington Supreme Court agreed with the appellate court's analysis and affirmed. The court observed that 24 U.S.C. § 407(a) forbids the transfer or reassignment of "[t]he right of any person to any future payment under this title." 978 P.2d at 501. While the Social Security Act does permit the reassignment of Social Security benefits to pay for alimony or child support, it categorically excludes any similar payment obligation for a community property settlement, an equitable distribution of property, or any other division between spouses or former spouses, the court said, citing 42 U.S.C. § 659(i)(3)(B)(ii).
The court also took note of Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979), which held that the federal Railroad Retirement Act preempted California's community property laws. Hisquierdo drew an analogy between Railroad Retirement Act benefits and federal Social Security benefits, the court observed.
In addition, the court cited Luna v. Luna, 125 Ariz. 120, 608 P.2d 57 (1979), and In re Marriage of Hillerman, 109 Cal. App. 3d 334, 167 Cal. Rptr. 240 (1980), which held that Social Security benefits are not subject to distribution as community property.
This review of authority convinced the court that "federal statutes secure social security benefits as the separate indivisible property of the spouse who earned them." In re Marriage of Zahm, 978 P.2d at 502.
But, in this case, the court noted, the trial court merely characterized the husband's Social Security benefits as community property, without actually dividing them. The husband argued that any consideration of Social Security benefits was reversible error, but the court disagreed.
The court acknowledged that Hisquierdo condemned offsetting awards, but found that prohibition not violated in this case. "The trial court neither computed a formal calculation of the value of the [husband's] social security benefits nor offset a formal numerical valuation into the court's property division via a specific counterbalancing award to the [wife]," the court explained. Id.
Several courts in other states have permitted consideration of Social Security benefits as a factor when distributing other assets, the court said, citing Mahoney v. Mahoney, 425 Mass. 441, 681 N.E.2d 852 (1997); In re Marriage of Brane, 21 Kan. App. 2d 778, 908 P.2d 625 (1995); Pongonis v. Pongonis, 606 A.2d 1055 (Me. 1992); and Rudden v. Rudden, 765 S.W.2d 719 (Mo. Ct. App. 1989).
The court acknowledged that other cases have reached a different conclusion, but found those cases distinguishable as involving a formal valuation and precise offset.
The court noted that Washington's property division statute expressly permits trial courts to consider the economic circumstances of each spouse at the time the property division is to become effective. A trial court cannot properly evaluate the economic circumstances of the spouses unless it can also consider the amount of Social Security benefits currently received, the court reasoned. Consideration of Social Security benefits as an economic circumstance is consistent with the statutory goals of a just and equitable property distribution, the court added.
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