An unpublished opinion from Ventura County helps us to understand who gets disability benefits at divorce.
Robert and Victoria married in 1978. In 1989 Robert bought a disability policy from Unum Insurance. The couple separated in 2004. Simultaneously Robert went on disability. By the time the case went to trial, the monthly disability benefits payable to Robert from the Unum policy totaled $12,000 per month. Robert wanted the payments all to himself as his separate property. Victoria argued that the payments were community property, and that she should get 50% of each payment.
Here it was decided that the payments were community property, and that Victoria was entitled to 50% of each payment.
The characterization of post-separation disability benefits depends on (1) whether the parties bought the policy during the marriage with community funds, and (2) “the extent to which the disability policies at issue were intended to provide retirement protection to both parties in their later years.” (In re Marriage of Saslow (1985) 40 Cal.3d 848, 862.) The evidence is undisputed that the parties bought the Unum Provident policy during the marriage with community funds. The benefits are community property if it was intended to replace retirement income. (Ibid.) But the benefits are separate property if it was intended to “replace postdissolution earnings that would have been the separate-property income of the disabled spouse.” (Id. at pp. 860-861.). . . .
Robert and Victoria bought disability policies during the marriage, long before either party contemplated dissolution. There was evidence that Robert was aware he might not be able to continue to the practice of law because of his disability. Substantial evidence supports the trial court’s implied finding that the parties intended the policies to provide retirement protection.
The take-away, it is going to be difficult to win on an argument that a disability policy purchased during marriage — particularly one purchased some 15 years before separation — will be characterized as the separate property of the spouse that later becomes disabled.
Please be sure to visit www.hardinglaw.com, the website for the law firm of Harding & Associates, for more information on California family law.
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