Social Security Benefits in Divorce Cases

One of the most important family law issues that vary from state to state is the question of whether Social Security benefits should be considered or offset when making property determinations. There is quite a bit of law on the subject and a thorough review of your own state's applicable law is required. A good place to start is the 2014 Oregon Supreme Court decision In re Marriage of Herald and Steadman, 355 Or. 104, 322 P.3d 546 (March 20, 2014). That case was taken to the United States Supreme Court, but certiorari was denied in January 2015. The lengthy Herald decision, which is summarized herein, analyzes the law in a number of states.

An Illinois appellate court affirmed the trial court's judgment in an unpublished decision, concluding that the court did not err by refusing to offset the value of the husband's pension in lieu of Social Security benefits by the value of Social Security benefits he would have received had he participated in Social Security. In re Marriage of Mueller, 2014 IL App (4th) 130918-U. Although that opinion was not published and therefore could not be cited as precedent, the Illinois Supreme Court accepted a discretionary petition for leave to appeal, heard oral argument in March of 2015 and recently decided the matter. The court's decision is discussed below.

The Mueller Decision

The Mueller trial court had awarded the wife (Shelley) a portion of the husband's (Christopher) police pension benefits. Pursuant to section 407(a) of the Social Security Act (42 U.S.C. ' 407(a) (2012)) and the Illinois Supreme Court's holding in In re Marriage of Crook, 211 Ill.2d 437, 449, 813 N.E.2d 198, 204 (2004), the court made its determination regarding the portion of Christopher's pension benefits to award Shelley without: 1) considering the value of Shelley's anticipated Social Security benefits; or 2) offsetting the value of Christopher's pension benefits by the value of Social Security benefits he would have received had he participated in Social Security instead of the pension in lieu of Social Security.

Shelley was employed in private industry and had Social Security tax withheld from her pay. Christopher was a police officer who participated in the Springfield Pension Fund and did not have Social Security withheld from his pay. Christopher presented expert testimony at the trial valuing his pension. The expert factored in an offset to compensate for the fact that Shelley's Social Security benefits would not be equitably divided, but that Christopher's pension benefits would be. Without this offset, the value of Christopher's pension increased by about $350,000. Shelley objected to the report due to the Social Security offset.

Christopher provided the trial court with a copy of Crook and argued that the Illinois Supreme Court explicitly left open the question of whether a court could, in the interests of equity, offset the value of a spouse's pension to put him or her “in a position similar to that of the other spouse whose Social Security benefits will be statutorily exempt from equitable distribution.” Crook , 211 Ill.2d at 452, 813 N.E.2d at 206. The court sustained Shelley's objection to the report and testimony. At the close of the hearing, the court reiterated that it would not consider the Social Security benefit offset.

The trial court later granted Christopher leave to file a revised report prepared by the expert as to the value of his pension without the Social Security offset applied, which reached a figure of $991,830. The court adopted that figure in its final findings and judgment.

The Appellate Decision

Christopher appealed, arguing that because the trial court could not consider Shelley's Social Security benefits in determining the equitable distribution of marital property, fairness required the court to offset its valuation of Christopher's pension by the value of Social Security benefits that he would have received, had he participated. The appellate court affirmed.

The Illinois Supreme Court addressed the issue “whether a court may offset a perceived disparity in Social Security benefits by awarding one party to a divorce a greater share of marital pension benefits.” Crook, 211 Ill.2d at 442, 813 N.E.2d at 200.

In its discussion, the court first turned to the statutory framework of the federal Social Security Act, which “imposes a broad bar against the use of any legal process to reach all [S]ocial [S]ecurity benefits.” Crook , 211 Ill.2d at 443, 813 N.E.2d at 201 (quoting Philpott v. Essex County Welfare Board, 409 U.S. 413, 417 (1973)). Specifically, section 407(a) of the Act provides as follows:

The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment or other legal process, or to the operation of any bankruptcy or insolvency law.

42 U.S.C. ' 407(a) (2012).

The Act also “explicitly exclude[s] any similar payment obligation arising from a 'community property settlement, equitable distribution of property, or other division of property between spouses or former spouses.” Crook, 211 Ill.2d at 444, 813 N.E.2d at 201 (quoting 42 U.S.C. ' 659(i)(3)(B)(ii) (2000)).

The court in Crook noted that although the United States Supreme Court had never addressed the question presented, it had addressed a similar question in Hisquierdo v. Hisquierdo, 439 U.S. 572 (1979). In Hisquierdo, the question was “whether retirement benefits awarded to an ex-spouse under the federal Railroad Retirement Act of 1974 (45 U.S.C. ' 231 et seq . (2000)) could be subject to attachment or an offsetting award during state divorce proceedings.” Crook, 211 Ill.2d at 444, 813 N.E .2d at 201. The Hisquierdo court answered that question in the negative based upon principles of federalism and the doctrine of preemption.

After holding that a direct division of Social Security benefits violated the federal statutory scheme, the Hisquierdo court next considered whether the state court could indirectly reach an equitable result by granting the ex-wife an offset award of available community property to make up for the ex-husband's expected retirement benefits, which the Railroad Retirement Act shielded from direct distribution. The Hisquierdo court rejected that argument. Hisquierdo, 439 U.S. at 588. '18-19.

The court in Crook, noting that courts in other jurisdictions have applied the reasoning of Hisquierdo to the division or offsetting of Social Security benefits in divorce proceedings, concluded that ” Hisquierdo establishes two important points: Social Security benefits may not be divided directly or used as a basis for an offset during state dissolution proceedings.” Crook, 211 Ill.2d at 449, 813 N.E.2d at 204. In so concluding, the court rejected the decisions of courts in other jurisdictions that approved of the trial court's consideration of Social Security benefits for purposes of equitable distribution of marital property. Crook, 211 Ill.2d at 449'51, 813 N.E.2d at 204'05. However, the court specifically noted that the issue of whether Hisquierdo prohibits awarding an offset to a spouse participating in a pension system in lieu of Social Security ' the issue Christopher presented in this case ' was not before it in Crook.

Christopher argued that Illinois should follow Cornbleth, Walker, Kelly and the recent Oregon Supreme Court case of In re Marriage of Herald and Steadman, 355 Or. 104, 322 P.3d 546 (Mar. 20, 2014). Each of those cases held that the trial court may offset the value of a pension in lieu of Social Security to put the spouse participating in a pension program in a similar position as the spouse participating in Social Security. Although the Illinois appellate court found these cases well-reasoned, it declined to follow them because they seemed incompatible with the supreme court's holdings in Crook.

In its decision in Herald , the Oregon Supreme Court noted that Illinois, along with Nebraska (Webster v. Webster, 271 Neb. 788, 716 N.W.2d 47 (2006)), Alaska (Cox v. Co, 882 P.2d 909 (1994)), Nevada (Wolff v. Wolff, 112 Nev. 1355, 929 P.2d 916 (1996)), and North Dakota (Olson v. Olson, 445 N.W.2d 1 (1989)), make up a minority of jurisdictions that “appear to have prohibited without exception any consideration of Social Security benefits that might or might not be available to either party in a marital property division.” Herald, 355 Or. at 119, 322 P.3d 546.

Based upon the Crook holdings that: 1) “it is improper for a circuit court to consider Social Security benefits in equalizing a property distribution upon dissolution” (Crook, 211 Ill.2d at 451, 813 N.E.2d at 205); and 2) Social Security benefits “may not be divided directly or used as a basis for an offset during state dissolution proceedings” (Crook, 211 Ill.2d at 449, 813 N.E.2d at 204), the appellate court in Mueller declined to reverse the trial court's judgment for failing to apply the Social Security benefit offset to the value of Christopher's pension. The Illinois Supreme Court stated in Crook that it was leaving resolution of the specific issue presented in this case for another day, and it obviously decided that the day had come.

The Illinois Supreme Court Decision

In June, 2015 the Supreme Court of Illinois affirmed the appellate court in a 5 to 2 decision, In re Marriage of Mueller, 2015 IL 117876. The court based its ruling on its prior decision in Crook and the United States Supreme Court case of Hisquierdo. It reasoned that Social Security participants do not have contractual benefits. Therefore, the benefits are mere expectancies not owned and thus not property acquired during the marriage. ”24-25. The Illinois Supreme Court disagreed with the ruling by the Oregon Supreme Court in Herald. It additionally held that attempting to place a present value on Social Security benefits is contrary to the nature of the benefits, and that placing a present value on hypothetical benefits is even worse speculation. '26. The court concluded, “A more coherent approach is to adhere to Crook , and Hisquierdo, and hold that Congress intended to keep Social Security benefits out of divorce cases.” '27. The dissent stated that Congress has not preempted the field of family law, and that doing as the husband requested in this case, would not violate Section 407(a) or the court's Crook decision. '43, '47. As to the majority's decision that Social Security benefits were speculative, the dissent pointed out that pensions are no less speculative, yet they are considered and divided in dissolution of marriage cases. '51.

Another district of the Illinois Appellate Court in In re Marriage of Wojcik, 362 Ill.App.3d 144, 838 N.E.2d 282, 296 (Ill. App. 2005) had previously held that Veterans Administration disability benefits due or to become due, could not be divided directly or offset. However, the benefits previously received and sitting in a bank account, although non-marital property, could be considered in the court's marital property division.

In Manning v. Schultz, 93 A.3d 566, 570 (Vt. Feb. 21, 2014) the Supreme Court of Vermont said, “We have little difficulty agreeing with those courts that have concluded that Social Security retirement benefits are not marital property and should not be divided, offset, or considered in the court's distribution of the marital estate.” However, this ruling was not based on federal preemption, which argument had been waived, but rather on the grounds that such benefits are a mere expectancy and therefore are speculative.

Conversely, after Mueller had been argued and while it was pending, yet another district of the Illinois Appellate Court filed an opinion, In re Marriage of Roberts, 2015 IL App (3d) 140263 (May 29, 2015). In that case, the wife was a teacher who had a pension from the Teachers Retirement System (TRS). The trial court equally divided that pension and she appealed, claiming that she should have been awarded the entire pension. The appellate court agreed with her and reversed. The wife had for some years worked as a nurse and at that time contributed to Social Security; thereafter she contributed to the TRS pension instead of Social Security. When she retires, her TRS pension will pay $2,056 per month. Her Social Security income at age 62 will be $282 per month. '4. The wife pointed out that on her retirement she will receive $1,310 per month from her Social Security and her half of the TRS pension. On the other hand her husband from his Social Security disability payments and half of her pension will receive almost $3,415 per month. '9.

The Mueller case was not mentioned in the Roberts decision. The appellate court, citing Crook , noted that Illinois law prohibits courts from giving any consideration to Social Security benefits when dividing marital property because that would conflict with federal law, which prohibits the transfer or assignment of Social Security benefits. '14.

The court noted that pension benefits attributable to contributions made during the marriage are subject to division. “However, a different rule may apply when one party is receiving Social Security benefits and the other party participated in a pension system in lieu of Social Security.” See Marriage of Crook, 211 Ill.2d at 452. Courts in other states have held that 'a spouse who participates in a pension system in lieu of Social Security must be placed in a position similar to that of the other spouse whose Social Security benefits will be statutorily exempt from equitable distribution.' Id. (citing In re Marriage of Kelly, 9 P.3d. 1046 (Ariz. 2000), Walker v. Walker, 677 N.E.2d 1252 (Ohio Ct. App. 1996) and Cornbleth v. Cornbleth, 580 A.2d 369 (Pa. Super. Ct. 1990)).” '15.

The Roberts court concluded that, “Since individuals receiving Social Security enjoy an exemption of those benefits from equitable distribution, individuals participating in a pension system in lieu of Social Security should be treated in the same way.” See Kelly, 9 P.3d 1048; Silcox v. Silcox, 6 S.W. 3d 899, 902 (Mo. 1999); Wallach v. Wallach, 37 A.D. 3d 707, 709 (N.Y. App. Div. 2007); In re Marriage of Kohler, 118 P.3d 621, 624-625 (Az. Ct. App. 2005); Bohon v. Bohon, 102 S.W. 3d 107, 110 (Mo. Ct. App. 2003); Cornbleth, 580 A.2d at 371; Walker, 677 N.E.2d at 1253-54.” '17.

The appellate court concluded that the trial court properly excluded the husband's Social Security benefits. However, the court not only considered the wife's TRS pension, but equally divided it. This resulted in the wife having a monthly deficit of $2,700 and the husband having a monthly surplus of $1,100. The court found this to be inequitable. It concluded, citing the above out-of-state cases, that since the wife participated in a pension system in lieu of Social Security, those pension benefits should not be subject to division. The trial court was directed on remand to determine the value of the Social Security benefit she would have received had she participated in Social Security instead of TRS. The court should then grant her that portion of the pension equal to what she would have received under Social Security. The portion of the pension in excess of the value of the Social Security benefits she would have received, if any, remain subject to equitable distribution. '20.

Conclusion

It appears that the court in Roberts followed the majority view from other states. The Illinois Supreme Court has now spoken on this issue. But until the United States Supreme Court decides this issue, each practitioner must completely research his or her own state's law.

Paul L. Feinstein, a member of this newsletter's Board of Editors, is a Chicago sole practitioner with 35 years of experience. He limits his practice to family law, with emphasis on divorce litigation, consulting, mediation and appeals. Reach him at paulfeinstein.com.

One of the most important family law issues that vary from state to state is the question of whether Social Security benefits should be considered or offset when making property determinations. There is quite a bit of law on the subject and a thorough review of your own state's applicable law is required. A good place to start is the 2014 Oregon Supreme Court decision In re Marriage of Herald and Steadman, 355 Or. 104, 322 P.3d 546 (March 20, 2014). That case was taken to the United States Supreme Court, but certiorari was denied in January 2015. The lengthy Herald decision, which is summarized herein, analyzes the law in a number of states.

An Illinois appellate court affirmed the trial court's judgment in an unpublished decision, concluding that the court did not err by refusing to offset the value of the husband's pension in lieu of Social Security benefits by the value of Social Security benefits he would have received had he participated in Social Security. In re Marriage of Mueller, 2014 IL App (4th) 130918-U. Although that opinion was not published and therefore could not be cited as precedent, the Illinois Supreme Court accepted a discretionary petition for leave to appeal, heard oral argument in March of 2015 and recently decided the matter. The court's decision is discussed below.

The Mueller Decision

The Mueller trial court had awarded the wife (Shelley) a portion of the husband's (Christopher) police pension benefits. Pursuant to section 407(a) of the Social Security Act (42 U.S.C. ' 407(a) (2012)) and the Illinois Supreme Court's holding in In re Marriage of Crook, 211 Ill.2d 437, 449, 813 N.E.2d 198, 204 (2004), the court made its determination regarding the portion of Christopher's pension benefits to award Shelley without: 1) considering the value of Shelley's anticipated Social Security benefits; or 2) offsetting the value of Christopher's pension benefits by the value of Social Security benefits he would have received had he participated in Social Security instead of the pension in lieu of Social Security.

Shelley was employed in private industry and had Social Security tax withheld from her pay. Christopher was a police officer who participated in the Springfield Pension Fund and did not have Social Security withheld from his pay. Christopher presented expert testimony at the trial valuing his pension. The expert factored in an offset to compensate for the fact that Shelley's Social Security benefits would not be equitably divided, but that Christopher's pension benefits would be. Without this offset, the value of Christopher's pension increased by about $350,000. Shelley objected to the report due to the Social Security offset.

Christopher provided the trial court with a copy of Crook and argued that the Illinois Supreme Court explicitly left open the question of whether a court could, in the interests of equity, offset the value of a spouse's pension to put him or her “in a position similar to that of the other spouse whose Social Security benefits will be statutorily exempt from equitable distribution.” Crook , 211 Ill.2d at 452, 813 N.E.2d at 206. The court sustained Shelley's objection to the report and testimony. At the close of the hearing, the court reiterated that it would not consider the Social Security benefit offset.

The trial court later granted Christopher leave to file a revised report prepared by the expert as to the value of his pension without the Social Security offset applied, which reached a figure of $991,830. The court adopted that figure in its final findings and judgment.

The Appellate Decision

Christopher appealed, arguing that because the trial court could not consider Shelley's Social Security benefits in determining the equitable distribution of marital property, fairness required the court to offset its valuation of Christopher's pension by the value of Social Security benefits that he would have received, had he participated. The appellate court affirmed.

The Illinois Supreme Court addressed the issue “whether a court may offset a perceived disparity in Social Security benefits by awarding one party to a divorce a greater share of marital pension benefits.” Crook, 211 Ill.2d at 442, 813 N.E.2d at 200.

In its discussion, the court first turned to the statutory framework of the federal Social Security Act, which “imposes a broad bar against the use of any legal process to reach all [S]ocial [S]ecurity benefits.” Crook , 211 Ill.2d at 443, 813 N.E.2d at 201 (quoting Philpott v. Essex County Welfare Board , 409 U.S. 413, 417 (1973)). Specifically, section 407(a) of the Act provides as follows:

The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment or other legal process, or to the operation of any bankruptcy or insolvency law.

42 U.S.C. ' 407(a) (2012).

The Act also “explicitly exclude[s] any similar payment obligation arising from a 'community property settlement, equitable distribution of property, or other division of property between spouses or former spouses.” Crook, 211 Ill.2d at 444, 813 N.E.2d at 201 (quoting 42 U.S.C. ' 659(i)(3)(B)(ii) (2000)).

The court in Crook noted that although the United States Supreme Court had never addressed the question presented, it had addressed a similar question in Hisquierdo v. Hisquierdo , 439 U.S. 572 (1979). In Hisquierdo, the question was “whether retirement benefits awarded to an ex-spouse under the federal Railroad Retirement Act of 1974 (45 U.S.C. ' 231 et seq . (2000)) could be subject to attachment or an offsetting award during state divorce proceedings.” Crook, 211 Ill.2d at 444, 813 N.E .2d at 201. The Hisquierdo court answered that question in the negative based upon principles of federalism and the doctrine of preemption.

After holding that a direct division of Social Security benefits violated the federal statutory scheme, the Hisquierdo court next considered whether the state court could indirectly reach an equitable result by granting the ex-wife an offset award of available community property to make up for the ex-husband's expected retirement benefits, which the Railroad Retirement Act shielded from direct distribution. The Hisquierdo court rejected that argument. Hisquierdo, 439 U.S. at 588. '18-19.

The court in Crook, noting that courts in other jurisdictions have applied the reasoning of Hisquierdo to the division or offsetting of Social Security benefits in divorce proceedings, concluded that ” Hisquierdo establishes two important points: Social Security benefits may not be divided directly or used as a basis for an offset during state dissolution proceedings.” Crook, 211 Ill.2d at 449, 813 N.E.2d at 204. In so concluding, the court rejected the decisions of courts in other jurisdictions that approved of the trial court's consideration of Social Security benefits for purposes of equitable distribution of marital property. Crook, 211 Ill.2d at 449'51, 813 N.E.2d at 204'05. However, the court specifically noted that the issue of whether Hisquierdo prohibits awarding an offset to a spouse participating in a pension system in lieu of Social Security ' the issue Christopher presented in this case ' was not before it in Crook.

Christopher argued that Illinois should follow Cornbleth, Walker, Kelly and the recent Oregon Supreme Court case of In re Marriage of Herald and Steadman, 355 Or. 104, 322 P.3d 546 (Mar. 20, 2014). Each of those cases held that the trial court may offset the value of a pension in lieu of Social Security to put the spouse participating in a pension program in a similar position as the spouse participating in Social Security. Although the Illinois appellate court found these cases well-reasoned, it declined to follow them because they seemed incompatible with the supreme court's holdings in Crook.

In its decision in Herald , the Oregon Supreme Court noted that Illinois, along with Nebraska ( Webster v. Webster , 271 Neb. 788, 716 N.W.2d 47 (2006)), Alaska ( Cox v. Co , 882 P.2d 909 (1994)), Nevada ( Wolff v. Wolff , 112 Nev. 1355, 929 P.2d 916 (1996)), and North Dakota ( Olson v. Olson , 445 N.W.2d 1 (1989)), make up a minority of jurisdictions that “appear to have prohibited without exception any consideration of Social Security benefits that might or might not be available to either party in a marital property division.” Herald , 355 Or. at 119, 322 P.3d 546.

Based upon the Crook holdings that: 1) “it is improper for a circuit court to consider Social Security benefits in equalizing a property distribution upon dissolution” (Crook, 211 Ill.2d at 451, 813 N.E.2d at 205); and 2) Social Security benefits “may not be divided directly or used as a basis for an offset during state dissolution proceedings” (Crook, 211 Ill.2d at 449, 813 N.E.2d at 204), the appellate court in Mueller declined to reverse the trial court's judgment for failing to apply the Social Security benefit offset to the value of Christopher's pension. The Illinois Supreme Court stated in Crook that it was leaving resolution of the specific issue presented in this case for another day, and it obviously decided that the day had come.

The Illinois Supreme Court Decision

In June, 2015 the Supreme Court of Illinois affirmed the appellate court in a 5 to 2 decision, In re Marriage of Mueller, 2015 IL 117876. The court based its ruling on its prior decision in Crook and the United States Supreme Court case of Hisquierdo. It reasoned that Social Security participants do not have contractual benefits. Therefore, the benefits are mere expectancies not owned and thus not property acquired during the marriage. ”24-25. The Illinois Supreme Court disagreed with the ruling by the Oregon Supreme Court in Herald. It additionally held that attempting to place a present value on Social Security benefits is contrary to the nature of the benefits, and that placing a present value on hypothetical benefits is even worse speculation. '26. The court concluded, “A more coherent approach is to adhere to Crook , and Hisquierdo, and hold that Congress intended to keep Social Security benefits out of divorce cases.” '27. The dissent stated that Congress has not preempted the field of family law, and that doing as the husband requested in this case, would not violate Section 407(a) or the court's Crook decision. '43, '47. As to the majority's decision that Social Security benefits were speculative, the dissent pointed out that pensions are no less speculative, yet they are considered and divided in dissolution of marriage cases. '51.

Another district of the Illinois Appellate Court in In re Marriage of Wojcik, 362 Ill.App.3d 144, 838 N.E.2d 282, 296 (Ill. App. 2005) had previously held that Veterans Administration disability benefits due or to become due, could not be divided directly or offset. However, the benefits previously received and sitting in a bank account, although non-marital property, could be considered in the court's marital property division.

In Manning v. Schultz , 93 A.3d 566, 570 (Vt. Feb. 21, 2014) the Supreme Court of Vermont said, “We have little difficulty agreeing with those courts that have concluded that Social Security retirement benefits are not marital property and should not be divided, offset, or considered in the court's distribution of the marital estate.” However, this ruling was not based on federal preemption, which argument had been waived, but rather on the grounds that such benefits are a mere expectancy and therefore are speculative.

Conversely, after Mueller had been argued and while it was pending, yet another district of the Illinois Appellate Court filed an opinion, In re Marriage of Roberts, 2015 IL App (3d) 140263 (May 29, 2015). In that case, the wife was a teacher who had a pension from the Teachers Retirement System (TRS). The trial court equally divided that pension and she appealed, claiming that she should have been awarded the entire pension. The appellate court agreed with her and reversed. The wife had for some years worked as a nurse and at that time contributed to Social Security; thereafter she contributed to the TRS pension instead of Social Security. When she retires, her TRS pension will pay $2,056 per month. Her Social Security income at age 62 will be $282 per month. '4. The wife pointed out that on her retirement she will receive $1,310 per month from her Social Security and her half of the TRS pension. On the other hand her husband from his Social Security disability payments and half of her pension will receive almost $3,415 per month. '9.

The Mueller case was not mentioned in the Roberts decision. The appellate court, citing Crook , noted that Illinois law prohibits courts from giving any consideration to Social Security benefits when dividing marital property because that would conflict with federal law, which prohibits the transfer or assignment of Social Security benefits. '14.

The court noted that pension benefits attributable to contributions made during the marriage are subject to division. “However, a different rule may apply when one party is receiving Social Security benefits and the other party participated in a pension system in lieu of Social Security.” See Marriage of Crook, 211 Ill.2d at 452. Courts in other states have held that 'a spouse who participates in a pension system in lieu of Social Security must be placed in a position similar to that of the other spouse whose Social Security benefits will be statutorily exempt from equitable distribution.' Id . (citing In re Marriage of Kelly , 9 P.3d. 1046 (Ariz. 2000), Walker v. Walker , 677 N.E.2d 1252 (Ohio Ct. App. 1996) and Cornbleth v. Cornbleth , 580 A.2d 369 (Pa. Super. Ct. 1990)).” '15.

The Roberts court concluded that, “Since individuals receiving Social Security enjoy an exemption of those benefits from equitable distribution, individuals participating in a pension system in lieu of Social Security should be treated in the same way.” See Kelly, 9 P.3d 1048; Silcox v. Silcox , 6 S.W. 3d 899, 902 (Mo. 1999); Wallach v. Wallach , 37 A.D. 3d 707, 709 (N.Y. App. Div. 2007); In re Marriage of Kohler, 118 P.3d 621, 624-625 (Az. Ct. App. 2005); Bohon v. Bohon , 102 S.W. 3d 107, 110 (Mo. Ct. App. 2003); Cornbleth, 580 A.2d at 371; Walker, 677 N.E.2d at 1253-54.” '17.

The appellate court concluded that the trial court properly excluded the husband's Social Security benefits. However, the court not only considered the wife's TRS pension, but equally divided it. This resulted in the wife having a monthly deficit of $2,700 and the husband having a monthly surplus of $1,100. The court found this to be inequitable. It concluded, citing the above out-of-state cases, that since the wife participated in a pension system in lieu of Social Security, those pension benefits should not be subject to division. The trial court was directed on remand to determine the value of the Social Security benefit she would have received had she participated in Social Security instead of TRS. The court should then grant her that portion of the pension equal to what she would have received under Social Security. The portion of the pension in excess of the value of the Social Security benefits she would have received, if any, remain subject to equitable distribution. '20.

Conclusion

It appears that the court in Roberts followed the majority view from other states. The Illinois Supreme Court has now spoken on this issue. But until the United States Supreme Court decides this issue, each practitioner must completely research his or her own state's law.

Paul L. Feinstein, a member of this newsletter's Board of Editors, is a Chicago sole practitioner with 35 years of experience. He limits his practice to family law, with emphasis on divorce litigation, consulting, mediation and appeals. Reach him at paulfeinstein.com.