In re Marriage of Roberts , 53 N.E.3d 17 ( 2015 )

2015 IL App (3d) 140263Opinion filed May 29, 2015
_____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2015
In re MARRIAGE OF Appeal from the Circuit Court
LINDA ROBERTS, ) of the 10th Judicial Circuit,
) Peoria County, Illinois,
Petitioner-Appellant, )
) Appeal No. 3-14-0263
) Circuit No. 11-D-851
and )
)
) Honorable
DAVID E. ROBERTS, ) Katherine Gorman,
) Judge, Presiding.
Respondent-Appellee. )
)
_____________________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court, with opinion.
Presiding Justice McDade and Justice O'Brien concurred in the judgment and opinion.
_____________________________________________________________________________
OPINION
¶1 After 37 years of marriage, petitioner, a teacher, filed a petition for dissolution of
marriage against respondent, a disabled pharmacist. The trial court divided the property of the
parties, and awarded each party a one-half interest in petitioner’s pension from the Teachers’
Retirement System (TRS). Petitioner appeals, arguing that the trial court should have awarded
her pension solely to her, or, alternatively, should have granted her maintenance in an amount
equal to the payments respondent would receive from her pension. We reverse and remand,
finding that the trial court erred in awarding half of petitioner’s TRS pension to respondent.
¶2 Petitioner, Linda Roberts, and respondent, David Roberts, married in 1974. Petitioner
filed a petition for dissolution of marriage in 2011. The petition stated that there were “no
arrangements between the parties concerning maintenance or the allocation of the property held
by the parties.” Plaintiff requested that she “be awarded a just and equitable portion of the
marital property” and “be granted such other and further relief as may be appropriate under the
evidence and circumstances.” Respondent filed a response to the petition, as well as a petition
for temporary maintenance. The parties filed cross petitions for dissipation of assets.
¶3 Testimony presented at trial established that the parties had three children during their
marriage. All of the children are now emancipated adults. At the time of trial, petitioner was 62
years old and working as a middle school science teacher. She had submitted her retirement
notice and had two more years to work before it took effect. Respondent was 61 years old and
worked as a pharmacist from 1974 to 2009. In 2009, he was found to be disabled and began
receiving Social Security disability benefits. In 2013, he was receiving disability benefits of
$2,386 per month.
¶4 In 1992, petitioner was hired as a teacher for Bartonville School District #66. Prior to
that, she worked as a nurse for several years and contributed to Social Security. From 1992 on,
she contributed to a 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.
¶5 Both parties submitted financial affidavits. According to respondent’s financial affidavit,
his monthly expenses total $2,235.61. According to petitioner’s second amended financial
2
affidavit, her monthly expenses total $4,064.36. In 2012, petitioner’s net income was
$37,694.52, and respondent’s net income was $27,319.40.
¶6 In her closing statement to the court, petitioner requested that all of the parties’ retirement
accounts, except for her TRS pension, be equally divided between the parties. She requested that
her TRS pension be awarded solely to her.
¶7 After hearing the evidence and testimony, the trial court announced its oral ruling on the
petition for dissolution and motions filed by the parties. The court equally divided the parties’
retirement accounts, which had a value of over $300,000. The court also ordered that
petitioner’s TRS pension be divided equally between the parties by a “Qualified Illinois
Domestic Relations Order” (QILDRO). The court ordered that the parties pay their own debts
and their own attorney’s fees. The court denied respondent’s request for maintenance and found
no dissipation of marital assets by either party. The court equally divided the cash assets
between the parties.
¶8 After the court announced its ruling, petitioner asked the court to allow her to pay
respondent one-half of the current value of her TRS pension instead of dividing future payments
between her and respondent and issuing a QILDRO in favor of respondent. The court declined,
stating: “[T]here’s no way to actually ascertain what the value is. I mean, so I’m going to stick
with my original order and ask that it be QLDRO’d [sic].”
¶9 Petitioner filed a motion to reconsider the court’s ruling, arguing that the court erred in
dividing her TRS pension and failing to award her maintenance because, upon her retirement,
she will receive a total of $1,310 per month from her pension and Social Security, while
respondent will receive monthly income of $3,414.90 from half of her pension and his Social
Security disability payments. At the hearing on the motion, petitioner requested that the court
3
either (1) award her TRS pension solely to her, or (2) order respondent to pay monthly
maintenance equal to the amount he would receive from her TRS pension upon her retirement.
The trial court denied petitioner’s motion.
¶ 10 I
¶ 11 Petitioner first argues that the trial court should have awarded her entire pension to her to
equalize the parties’ incomes after she retires.
¶ 12 Pursuant to section 503(d) of the Illinois Marriage and Dissolution of Marriage Act (Act),
marital property, which includes pensions, must be divided in “just proportions.” 750 ILCS
5/503(d) (West 2012); In re Marriage of Callahan, 2013 IL App (1st) 113751, ¶ 21. While the
distribution need not be mathematically equal, it must be equitable. Id.¶ 13 The trial court has broad discretion in the division of marital assets. In re Marriage of
Wojcik, 362 Ill. App. 3d 144, 161 (2005). We will reverse a trial court’s division only where it
constitutes an abuse of discretion. Id. An abuse of discretion occurs when no reasonable person
would take the view adopted by the trial court. Id.¶ 14 While most other states permit trial courts to consider a spouse’s current or anticipated
Social Security benefits in making an equitable distribution of marital assets, Illinois prohibits
courts from giving any consideration to Social Security benefits when dividing marital property.
In re Marriage of Crook, 211 Ill. 2d 437, 449-50 (2004). According to our supreme court,
considering Social Security benefits in dividing marital property would conflict with federal law,
which prohibits the transfer or assignment of Social Security benefits. Id. at 443-53 (citing 42
U.S.C. § 407(a) (2000)). “A trial court dividing assets in a marital-dissolution proceeding should
simply not give any consideration to federal social security benefits * * *.” In re Marriage of
Rogers, 352 Ill. App. 3d 896, 898 (2004).
4
¶ 15 Pension benefits attributable to contributions made during marriage are considered
marital property and subject to division upon dissolution of the marriage. 750 ILCS 5/503(b)(2)
(West 2012); In re Marriage of Culp, 399 Ill. App. 3d 542, 546 (2010). 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 (refusing to decide whether a spouse who participates in a pension system in lieu of Social
Security should be treated similarly as the other spouse who receives Social Security benefits).
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)).
¶ 16 The intent and purpose of Social Security is to provide a source of income for retired
persons. See Helvering v. Davis, 301 U.S. 619, 641 (1937) (Social Security Act was created “to
save men and women from the rigors of the poor house as well as the haunting fear that such a
lot awaits them when journey’s end is near”). Similarly, the purpose of state-created pension
systems, such as TRS, is to provide a stream of income to workers after they retire so that they
can support themselves. See 40 ILCS 5/16-101 (West 2012) (TRS created to provide retirement
annuities and other benefits for teachers, annuitants and beneficiaries); see also 40 ILCS 5/14-
102 (West 2012) (purpose of State Employees’ Retirement System of Illinois is “to provide an
orderly means whereby aged or disabled employees may be retired from active service, without
prejudice or hardship, and to enable employees to accumulate reserves for themselves and their
dependents for old age, disability, death and termination of employment”).
5
¶ 17 Public “pensions paid to government employees ‘are generally designed to take the place
of * * * social security.’ ” Bowman v. Barnhart, 218 F. Supp. 2d 960, 964 (N.D. Ill. 2002)
(quoting H.R. Rep. No. 98-25, at 22 (1983), reprinted in 1983 U.S.C.C.A.N. 219, 239-40).
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 at 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, 624-25 (Ariz. 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.
¶ 18 In this case, the trial court properly excluded respondent’s Social Security benefits in its
division of marital property. However, the court not only considered petitioner’s TRS pension,
but equally divided it between the parties. As a result, when petitioner retires, she will receive a
total monthly income of $1,310.00, consisting of her Social Security benefits and her half of her
pension, while respondent will receive monthly income of $3,414.90, consisting of his Social
Security benefits and his half of petitioner’s pension. The parties’ financial affidavits show that
petitioner’s monthly expenses are $4,064.36, and respondent’s are $2,235.61. The trial court’s
division of property will leave petitioner with a monthly deficit of $2,700, while respondent will
enjoy a monthly surplus of $1,100.
¶ 19 The Act requires that the division of marital assets be equitable. Callahan, 2013 IL App
(1st) 113751, ¶ 21. Here, where the trial court equally divided petitioner’s TRS pension benefits,
between petitioner, who will receive less than $300 per month in other income after retirement,
and respondent, who is receiving more than $2,000 per month in other income, the division of
marital assets was inequitable. Similarly, since petitioner participated in a pension system in lieu
6
of Social Security, the TRS pension benefits that she earned instead of Social Security should not
be subject to division. See Kelly, 9 P.3d at 1048; Wallach, 37 A.D.3d at 709; Silcox, 6 S.W.3d at
902; Kohler, 118 P.3d at 624-25; Bohon, 102 S.W.3d at 110; Cornbleth, 580 A.2d at 371;
Walker, 677 N.E.2d at 1253-54. These jurisdictions hold that only the portion of a pension that
exceeds the benefits the party would have earned under Social Security should be included in the
marital estate for equitable distribution purposes. See Wallach, 37 A.D.3d at 709; Cornbleth,
580 A.2d at 372; Walker, 677 N.E.2d at 1253-54. We agree and find this to be an equitable
distribution under the statute.
¶ 20 We reverse that portion of the trial court’s award that grants respondent one-half of
petitioner’s TRS pension. On remand, the court must determine the value of the Social Security
benefits petitioner would have received if she had participated in Social Security instead of TRS.
See Wallach, 37 A.D.3d at 709. The court should then grant petitioner that portion of her
pension equal to what she would have received under Social Security. See id. The portion of
petitioner’s pension exceeding the value of the Social Security benefits she would have received,
if any, remains subject to equitable distribution. See id.; Cornbleth, 580 A.2d at 372; Walker,
677 N.E.2d at 1253-54.
¶ 21 II
¶ 22 Petitioner alternatively contends that the trial court should have awarded her maintenance
equal to the payments respondent will receive from her TRS pension. Since we have reversed
the trial court’s award of one-half of petitioner’s pension to respondent, we need not address this
issue.
¶ 23 The judgment of the circuit court of Peoria County is reversed, and the cause is
remanded.
7
¶ 24 Reversed and remanded.
8