Family Law Case Review: Hardin v. Hardin

Case: Robert Hardin v. Carlotta Hardin
by Mike Kohlhaas, Bingham Greenebaum Doll  

HELD: Where divorce court expressed an intention to divide the coverture portion of Husband’s pension equally, it was error to miscalculate the number of months during the marriage that Husband’s pension benefit accrued.

NOTABLE DICTA: Language used by the Court of Appeals in dicta suggests that only the coverture portion of a pension is “marital property” under Indiana law: “The $1784.16 monthly payment should be multiplied by the coverture fraction (7/38), which equals approximately $328.66. Thus, $328.66 is the amount of Husband’s pension which is marital property that must be divided.” [Emphasis supplied.]

HELD: The Court of Appeals suggests that the trial court erred by not considering the “potential tax consequences” related to the personal savings plan and individual retirement account that were awarded to Husband; however, the Court of Appeals concluded that Husband waived the issue by failing to present evidence of the tax consequences to the trial court.

FACTS AND PROCEDURAL HISTORY: Husband and Wife married in 1979, divorced in 1986, remarried in July 1993. Wife filed her petition for dissolution in June 2010. Husband worked for GM from 1963 until he retired in 2000, where he participated in GM’s pension plan.

At the final hearing, neither party put on evidence of the value of Husband’s pension. In its Decree, the trial court concluded it would be just and equitable to divide the entire marital estate – except for Husband’s pension – 54/46 in Wife’s favor; for Husband’s pension, the trial court concluded that the coverture portion should be divided 50/50 between the parties.

In showing its work, the trial court erroneously stated that 17 years – rather than 7 – of Husband’s 38 total years of service under the plan occurred during the marriage. Husband appealed the resulting calculation.

The Court of Appeals agreed with Husband that the trial court’s mistake constituted error, and re-performed the coverture fraction calculation to be implemented on remand. In dicta, the Court of Appeals employed language suggesting that only the coverture portion of the pension is marital property: “The $1784.16 monthly payment should be multiplied by the coverture fraction (7/38), which equals approximately $328.66. Thus, $328.66 is the amount of Husband’s pension which is marital property that must be divided.” [Emphasis supplied.]

Husband also assigned error to the trial court’s failure to consider the potential tax consequences of the personal savings plan and IRA that were awarded to him. While the Court of Appeals agreed with Husband in principle, it concluded that Husband waived this issue by failing to put on evidence of what the tax implications of each plan would be. [This case is a notable continuation of what appears to be a change in the case law, from requiring the consideration of tax consequences only when they are triggered by the property distribution itself, to requiring consideration of mere “potential tax consequences” that will likely arise on some date in the future, but not arising directly from the divorce. – Ed.]

The case was remanded to the trial court to recalculate the pension award to Wife in a manner consistent with the Court of Appeals’ opinion.

To view the text of this opinion in its entirety, click here: Robert Hardin v. Carlotta Hardin

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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