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Court rules on military retirement benefits during divorce

January 1, 2007
State courts can't treat military retirement pay waived for veterans' disability pay as marital property to be divided during divorce, the Indiana Court of Appeals ruled today.

Citing caselaw from the nation's highest court, a unanimous three-judge panel reversed and remanded a Randolph County decision in William A. Griffin, Jr. v. Shari L. Griffin, No. 68A01-0611-CV-491.

William and Shari married in 1985 and divorced in 2006, agreeing as part of the dissolution to divide in half his $1,522 retirement pay from the U.S. Air Force. But when William applied for disability benefits from the Veterans Administration, he was told he'd have to waive part of his military retirement benefits. He did so and paid half of that remaining portion to his former wife, who later filed a contempt petition accusing him of failing to make the required pension payments.

Randolph Circuit Judge Jay Toney entered a post-dissolution order clarifying the parties' property settlement agreement, holding that William Griffin would have to pay Shari Griffin 50 percent of his total military retirement income, including disability payments.

The appellate court disagreed, citing Supreme Court of the United States decisions in Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023 (Mansell I) that held VA disability benefits are not divisible marital property. Shari Griffin had argued at the lower level Mansell I didn't apply because of subsequent decisions on remand.

"Following Mansell I, the statute in question has undergone revisions, but the basis for the Mansell I opinion remains in the statute - state courts do not have the authority to treat military retirement pay that has been waived to receive veterans' disability benefits as property divisible upon divorce," the court wrote.
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