Thursday, March 17, 2011

Michigan case law update: Social security benefits

In a published opinion that came out earlier this week, the Michigan Court of Appeals decided an issue of first impression regarding social security benefits in the case of Biondo v Biondo, No. 294694 (March 15, 2011). This case originated in Oakland County.

The parties were married for 40+ years and in their Judgment of Divorce, they equally divided their assets as well as their social security benefits. When Wife attempted to enforce the Judgment, Husband argued that federal law trumped (in that the trial court lacked jurisdiction to enforce the judgment in violation of federal law) and that Wife could not enforce the Judgment. Husband worked for a car manufacturer while Wife was a stay-at-home mother to their children.

It was ultimately held that federal law does trump in this instance and that it was incorrect for the parties to deem their social security benefits as marital property. Instead, the Court of Appeals decided that the benefits are relevant to the Sparks factors. In the case of Sparks v Sparks, 440 Mich 141 (1992), the Michigan Supreme Court held that there are several relevant factors to consider when dividing marital property including (1) the duration of the marriage, (2) contributions of the parties to the marital estate, (3) age of the parties, (4) health of the parties, (5) life status of the parties, (6) necessities and circumstances of the parties, (7) earning abilities of the parties, (8) past relations of the parties, and (9) general principles of equity.

In Biondo, it was held that the amount of a spouse's anticipated or received social security benefits qualifies as relevant to several of the Sparks factors, including the contributions each party made to the marital estate, their necessities and circumstances, and general equity principles. Thus the trial court may consider the parties' benefits as one factor, among others, to be generally considered when dividing the estate, but the benefits may not be "tantamount to a marital asset." This case was ultimately remanded to the trial court for further proceedings consistent with this ruling.

For more information on Social Security and Divorce, click here for a previous blog post on the topic or contact us at Hickey, Cianciolo, Fishman & Finn, P.C.

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