Veteran's disability payments became divisible marital property
In Pennsylvania, property acquired during a marriage is presumed to be marital property, although the law sets out an exception for veterans' benefits.
October 30, 2013 /24-7PressRelease/ -- Veteran's disability payments became divisible marital property
Article provided by Gary R. Swavely, Jr.
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Under Pennsylvania law, property acquired during a marriage is presumed to be marital property, although the law sets out eight exceptions to this presumption. One of those exceptions exempts veterans' benefits.
However, there are circumstances under which money related to veterans disability benefits could be considered marital property subject to equitable distribution. The Pennsylvania Superior Court case of Goodemote v. Goodemote provides one example.
Value of deposited benefits grew during marriage
The parties to the proceeding were married in 1991 and divorced in 2011. The husband was a veteran who served in the Vietnam War. Due to injuries, the husband had received monthly veterans' disability benefits payments continuously since his discharge in 1969.
During the husband's first marriage, which ended in divorce in 1978, the husband opened an investment account, in his name alone, to which he deposited his VA payments. During the parties' marriage, the value of the account grew substantially due to re-investment of the interest and dividends.
The trial court determined that although the account accrued during the course of the parties' marriage, it was not subject to equitable distribution based on the exception for veterans benefits. The wife appealed.
Conversion to a permanent investment?
The Superior Court noted that there is a three-part test for veterans' disability benefits payments to retain their exempt status. Specifically, the funds must: (1) be readily available as needed for support and maintenance; (2) actually retain the qualities of moneys; and (3) have not been converted into permanent investments. In the instant case, the husband failed to meet the third prong of the test.
The husband's VA payments were not his only means of support since he was employed full-time for 34 years and received pension payments from his former employer. Indeed, the husband never withdrew any funds from the investment account.
In addition, the investment account was not merely a savings account; rather, it was comprised of several investment portfolios that were subject to gains and losses, including securities, mutual funds and annuities. The federal VA payments lost their exempt status when he converted those funds into a permanent investment.
Thus, the increase in value of the investment account was marital property subject to equitable distribution in the divorce proceeding. The wife was entitled to a 50 percent portion of the increase in value that accrued during the parties' marriage.
Asset division can be difficult
It is crucial that you have a strong advocate to protect your interests in negotiation and litigation of asset division, whether the property is your benefits, your residence, or other assets. Seek an experienced family law attorney who will help you plan for your divorce, work through the grounds for filing, and ensure you receive your fair share of the marital assets.
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