Tier I Railroad Retirement Benefits Are Not Marital Property Subject to Division

Case: Benny Harris v. Tonya Harris (n/k/a Keith)
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Tier I railroad retirement benefits, like Social Security retirement benefits, are not marital property subject to division or consideration in divorce property division.

Husband and Wife were married in 2008, and Wife filed a petition for dissolution of marriage in early 2013. Following a final hearing, the trial court determined an overall 50/50% division of the marital estate was appropriate. Though the trial court recognized that Husband’s Tier I railroad retirement benefits likely could not be segregated and divided, the Decree ordered Husband to pay half of his benefit payments to Wife whenever Husband went into pay status. Husband appealed the Decree.

After a detailed review of state and federal law, the Court of Appeals concluded that Husband’s Tier I railroad retirement benefits were intended by Congress, much like Social Security retirement benefits, to be altogether excluded from marriage dissolution property division. Therefore, the term of the Decree ordering Husband to divide future payments with Wife was reversed.

Interestingly, the Court also noted that this reversal required on remand no further review of the overall division of the marital estate. The Court reasoned that any further changes to the overall division of the marital estate based upon the exclusion of the Tier I benefits would necessarily require an improper consideration of how Husband’s Tier I benefits enhanced Husband’s economic circumstances.

Judge Kirsch wrote a brief separate opinion, dissenting on the final point referenced above. “[I]t is entirely appropriate for the trial court to consider Husband’s exclusive right to the Tier I benefits as it impacts his overall economic circumstances in dividing the remainder of the marital estate.”

To view the text of this opinion in its entirety, click here: Benny Harris v. Tonya Harris (n/k/a Keith)



James A. Reed and Michael R. Kohlhaas of Bingham Greenebaum Doll represent clients in a wide spectrum of relationship transition and wealth planning matters, including premarital agreements, estate planning, cohabitation, separation, divorce (especially involving high net worth individuals and/or complex asset issues), custody, parenting arrangements, adoption, and domestic partnerships. Bingham Greenebaum Doll, a multidisciplinary law firm serving regional, national, and international clients, is the fourth-largest law firm in Indiana. The firm’s main practices include corporate, property, litigation, labor, government law, and personal services law. Visit the firm’s website at www.bgdlegal.com.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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