Family Law Case Review: Trial Court Erred Concluding Wife had Interest in Husbands Annuity Payments

Case: Wesley McDivitt v. Sue McDivitt
by Mike Kohlhaas, Bingham Greenebaum Doll

HELD: Trial court erred when it concluded that Wife had acquired an interest in certain annuity payments payable to Husband.

FACTS AND PROCEDURAL HISTORY:
Husband and Wife married in 1999. Prior to their marriage, the parties entered into a premarital agreement. In relevant part, the premarital agreement kept each party’s respective retirement interests separate from the other.

Husband retired a year later, and signed a severance agreement with his employer. Husband also elected to begin receiving his pension as a “joint with 100% to survivor” annuity. The payments to Husband commenced and were payable to Husband alone.

In 2014, Husband filed for dissolution of marriage. All issues were resolved by agreement, except for the question of this annuity. Wife argued that she had an interest in the annuity arising from the terms of Husband’s severance agreement, which included: “Annuity payments under a joint and survivor annuity shall be payable to the Participant and the Co-Annuitant while both are living and to the survivor of them after the death of the first of them.”

The trial court agreed with Wife, concluding Wife was a “Co-Annuitant.” Husband was ordered to pay one-half of his annuity payments during his life to Wife. Husband appealed.

The Court of Appeals disagreed with the trial court’s conclusion that Wife was a Co-Annuitant. Husband’s severance agreement contained a blank to list a co-annuitant, which was not filled in. Instead, Wife had been listed as a beneficiary: “the person . . . to receive any benefits due after the death of the Participant . . . .”

The Court also considered it significant that all checks made during the marriage were payable to Husband’s name alone. In addition, the record included a letter from the plan administrator stating that Wife was only a beneficiary of the plan.

The Court of Appeals reversed the trial court, finding error when the trial court concluded Wife had an interest in the lifetime payments from the annuity to Husband.

To view the text of this opinion in its entirety, click here: Wesley McDivitt v. Sue McDivitt

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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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