Purchase of pre-marital pension with marital funds in Florida divorce
Posted by Nydia Streets of Streets Law in Florida Divorce
A recent Florida appellate case examines whether or not a decision during the marriage to purchase credit for premarital years of employment for a pension plan renders the pension a marital asset. This issue arose in the case Martin v. Martin, 1D18-2546 (Fla. 1st DCA June 20, 2019).
The appellate court reviewed de novo the trial court’s decision to classify the former husband’s pension as a marital asset. The facts are stated in the opinion as follows: “Prior to the marriage, appellant worked for the military for 8 years, 2 months, and 25 days. He then worked for the federal civil service for 5 months and 6 days prior to the marriage, and he continued to work for the civil service after the marriage for just over 4 years. Appellant left that position and cashed out all of the retirement benefits that he had accrued with the civil service. Shortly thereafter, he returned to civil service where he worked for another 24 years, and he retired prior to dissolution. While married, during his second tenure with civil service, appellant used $9,866 of marital funds to "purchase" his years of military service so they would count towards his civil service pension. Appellant testified that he and the former wife jointly agreed to pay the $9,866, which they paid in installments over an 8-year period prior to his retirement, because it would be better for both of them down the road financially. Purchasing those years did not increase appellant's regular monthly contribution towards his pension.”
After determining there were no Florida cases directly on point, the appellate court examined decisions in other states on this issue. The former husband argued the trial court incorrectly found the portion of his pension attributable to his years of premarital military service to be marital property. However, the appellate court found the party claiming an asset to be non-marital has the burden of proving the asset is non-marital. There is a presumption that assets acquired during the marriage with marital funds are marital assets. The appellate court therefore found, “In this case the asset, prior years of service, was acquired totally utilizing marital funds based on the parties' joint decision to make 8 years of installment payments because it would be better for the couple financially in the future. The option to purchase and the decision to purchase the prior service arose out of appellant's second tenure with civil service, which occurred entirely during the marriage. The only testimony concerning the value of his prior military service was that it had zero value for retirement purposes. Thus, appellant failed to overcome the presumption that this asset purchased with marital funds was marital property.”
Many decisions in Florida family law cases turn on the specific facts of the case. This is why it is important to consult with a Miami divorce lawyer about your case to determine how the law may be applied to the unique aspects of your situation. Schedule a consultation to learn more.