Mansell v. Mansell
490 U.S. 581, 109 S.Ct. 2023, 104 L.Ed.2d 675 (1989)
Gerald was retired from the
military and was married to Gaye for 23 years and 6 kids. They got a
divorce.
Gerald was receiving
disability pay from the military. Under Federal law (10 U.S.C. §3105), to prevent double dipping, Gerald had to voluntarily
waive part of his military pension in order to get his disability
benefits.
That was still a good deal
because disability benefits are non-taxable.
At Trial, an issue came up
with what constituted marital property:
Disability benefits are
generally considered separate property and are therefore not divisible upon divorce.
Under California law, a
pension is considered marital property and is therefore divisible.
But, in McCarty v.
McCarty (453 U.S. 210 (1981)), the
US Supreme Court said that under the law as it was at the time, States
could not count military pensions as community property.
The idea was that military
benefits should be enjoyed by the soldier, not by the non-military
spouse.
But what to do with the
pension benefits that Gerald was voluntarily waiving?
In response to McCarty, Congress had passed a specific Statute, the
Uniformed Services Former Spouses' Protection Act (10 U.S.C. §1408(c)(1)) that vaguely said that States can treat
military pensions (aka retirement benefits) as community
property but that any amount waived
to receive disability benefits is to be deducted before the money is
divided between the ex-spouses.
On the other hand, in
general, when a spouse voluntarily
lowers their income, they do not get to factor that into division of
property.
For example, you can't
quit your job and then claim you can't make support payments because
you are unemployed.
The Trial Court found for Gaye
and ordered Gerald to pay her 50% of his retirement pay before factoring the disability waiver. He appealed.
The Appellate Court affirmed.
Gerald appealed.
The Appellate Court found
that McCarty still ruled and that
10 U.S.C. §1408(c)(1) only
applied to disposable retirement pay (which wouldn't
include money that was waived.)
The California Supreme Court
denied cert. Gerald appealed.
The US Supreme Court reversed.
The US Supreme Court looked
at the plain language of 10 U.S.C. §1408(c)(1), as well as the legislative history and
legislative intent. They found that the Statute, as written,
did not allow States to treat waived military pension benefits as community
property.
The Statute very clearly
said that disability benefits were exempt. But preventing non-military
spouses from getting money was probably an unintended consequence.
In a dissent, it was argued
that 10 U.S.C. §1408(c)(1) was a
remedial Statute designed specifically to get around McCarty. Therefore, it should be read to allow States
to consider waived pension benefits as community property.
To do otherwise would be inequitable, since disability benefits could
equal up to 80% of total benefits.
It was also argued that
courts could compensate for the inability to divide disability benefits
by unequally dividing marital property.
So instead of giving Gerald
50% of the combined assets, maybe they'd just give him 40%. They
wouldn't technically be dividing the disability benefits, but they would
be using the disability benefits as a factor in equitable division of
the marital property.
Of course, if there is no marital
property to divide, that's not a
possibility.