INFO - Divorce and Social Security benefits

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DivorceSource.com

National Legal Research Group

1995

Social Security Disability Benefits. Most cases discussing the

classification of Social Security benefits have involved old-age

insurance benefits, but as with old-age benefits, courts have held

that federal law preempts distribution of Social Security disability

benefits as marital or community property. E.g., Luna v. Luna , 125

Ariz. 120, 608 P.2d 57 (Ct. App. 1979); In re Marriage of Knipp, supra

; v. , supra . Contra Wiercinski v. Wiercinski, supra

(Social Security Act's antiassignment provision does not extend to

essential family obligation such as equitable distribution; federal

law did not preclude trial court from including a husband's Social

Security disability benefits as marital property, where the payments

had already been received and placed in a joint bank account).

Hence, even in states that classify disability benefits as marital

property, Social Security disability payments are sheltered from

distribution by federal law. See Crocker v. Crocker, supra (court

distinguished Social Security disability benefits from other

disability benefits that would be considered distribution under

Oklahoma law).

In some states Social Security disability benefits may be the injured

spouse's separate property as a matter of state law because the

benefits represent compensation for disability. See Wiercinski v.

Wiercinski, supra (court acknowledged that disability benefits are

recipient's separate property to the extent they represent

compensation for personal injuries, but decided that husband's Social

Security disability payments became marital property when they were

placed in spouses' joint account).

Benefits Already Received. Does the federal preemption problem vanish

when the case involves Social Security benefits that have already been

received? In In re Marriage of Knipp, supra , the wife, seeking to

share in the husband's lump-sum Social Security disability benefits,

argued that the Social Security Act's antiassignment provision applies

only to prospective benefits and not to benefits already received,

because that section, 42 U.S.C. Sec. 407(a), specifically refers to

" future payment. " The Kansas Court of Appeals disagreed, however,

noting the United States Supreme Court's holding in Philpott v. Essex

County Welfare Board, supra , that Sec. 407(a) applies broadly to

benefits already received and deposited into a savings account. Citing

Philpott , the court characterized the antiassignment statute as being

" all-inclusive " and further commented that Sec. 407(a) " imposes a

broad bar against the use of any legal process to reach all social

security benefits, " In re Marriage of Knipp, supra , 809 P.2d at 563

(quoting Philpott v. Essex County Welfare Board, supra , 409 U.S. at

417).

Similarly, the Iowa Court of Appeals held that the doctrine of federal

preemption applies not only to Social Security benefits payable in the

future but also to those paid during marriage, since the Act's

antiassignment provision prohibits legal process against " moneys paid

or payable. " The court decided that Social Security benefits received

by a husband and deposited into bank accounts during the marriage were

his separate property unless the benefits had been transmuted into

community property by being commingled with community funds. Bowlden

v. Bowlden , 118 Idaho 89, 794 P.2d 1145 (Ct. App. 1989), overruled on

other grounds , 118 Idaho 84, 794 P.2d 1140 (1990).

In a few cases, courts have classified Social Security benefits

already received by the employee spouse as marital property. Lee v.

Lee, supra ; Wiercinski v. Wiercinski, supra.

http://www.divorcesource.com/research/edj/socialsecurity/95nov121.shtml

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