Survivor benefits not excluded from marital assets, COA says

The Indiana Court of Appeals has affirmed a trial court’s division of a divorced couple’s marital property, finding the wife’s survivor benefit from her ex-husband’s pension could not be excluded from the marital assets.

As a longtime employee of the Lake County Sheriff’s Department entitled to receive a pension, Dale Bock made an election for his wife, Celene, to receive a survivor benefit under the pension plan, with the election set to become irrevocable once he began taking disbursements. Bock retired in 2005, and 10 years later his wife filed for divorce.

As part of the proceedings, Celene moved to exclude her survivor benefit from the marital estate. But in July 2017, the Lake Superior Court issued a dissolution decree valuing the pension at $460,211.60, to be divided equally, and including the survivor benefit as marital property. The benefit, valued at $83,401, was awarded to Celene.

The trial court denied Celene’s motion to correct error, so she appealed, arguing the court erred in including the benefit in the marital estate. Specifically, Celene claimed it should have been excluded from the marital pot because it was subject to complete defeasance if she died before Dale, making it too speculative and remote to constitute marital property. 

But the appellate court rejected her reliance on Harrison v. Harrison, 88 N.E.3d 232, 235 (Ind. Ct. App. 2017), trans. denied (2018), noting the difference between family trusts in that case and pension benefits in Celene’s case. Citing Carr v. Carr, 49 N.E.3d 1086, 1087 (Ind. Ct. App. 2016), the appellate court noted that it is the pension earner’s right to the pension, not the survivor benefit designee’s right, that must vest during the marriage for the property to be considered part of the marital estate.

“In other words, where pensions are involved, both parties’ interests are, to a certain extent, remote and speculative,” Judge Terry Crone wrote. “At the same time, pension interests often represent a significant portion of the marital estate, particularly when the parties are older and one or both spouses have participated in the pension plan(s) for a significant length of time.”

The panel thus concluded that the trial court did not err in including Celene’s SBP interest in the marital estate.

Celene then contended the trial court abused its discretion in dividing the marital property equally, requesting the trial court award her 58 percent of the marital estate due to the disparity in the parties’ economic circumstances.

“To the extent that Wife cites as unfair Husband’s receipt of the marital residence, a present enjoyment, in contrast to her SBP, a future defeasible interest, we will not revisit her argument that the SBP should not have been included in the marital estate,” Crone wrote. The trial court was unpersuaded by either party’s argument concerning property division and found, ‘Neither party has proven by a preponderance of the evidence that an equal division of the marital estate would not be fair and reasonable such that the statute should be rebutted.’ We agree, especially in light of the thirty-year duration of their marriage.”

The appellate court thus concluded that the trial court acted within its discretion in ordering the equal division of the marital estate in Celene I. Bock v. Dale F. Bock,18A-DR-38.