Boulter v. Boulter
113 Nev. 74, 930 P.2d 112 (1997)
Ronald was married to Noleen
for 37 years. They filed for divorce and executed a property settlement
agreement (aka a separation agreement).
The separation agreement
was merged into the divorce
decree.
Merged means that it was an official part of the
divorce decree, not a separate contract.
The separation agreement stipulated that both Ronald and Noleen would
each split their social security checks 50-50.
When Ronald turned 65, he
spitefully declined to apply for his social security benefits. That meant
he was missing out on money for himself, but it also meant that he'd owe
Noleen 50% of nothing.
Noleen argued that Ronald
should pay her an equivalent amount out of his own funds.
Ronald argued that the separation
agreement didn't stipulate that they
had to apply for benefits, only that they had to give the other party 50%
of what they received.
Ronald also argued that the separation
agreement should be void because
there is a Federal law (42 U.S.C. ¤407(a)) prohibiting
division of social security benefits.
The Trial Court found for
Noleen and issued an order to compel Ronald to apply for social security
benefits. Ronald appealed.
The Trial Court found that
since Roland's lawyer prepared the agreement, any ambiguities should be
resolved against Ronald.
The Court found it was
ambiguous whether or not the separation agreement required the parties to accept their social
security benefits.
The Nevada Supreme Court
reversed.
The Nevada Supreme Court
found that the separation agreement
had been merged into the
divorce decree. That constitutes State action that has been preempted by
Federal law.
See Philpott v. Essex
County Welfare Bd. (409 U.S. 413
(1973)), which imposes "a broad bar against the use of any legal
process to reach all social security benefits."
The Court found that social
security recipients may use the proceeds of their social security, after
receipt, to satisfy preexisting obligations, but they may not contract to
transfer their unpaid benefits.