Posted by Nydia Streets of Streets Law in Florida Divorce
Are disability benefits from a federal retirement account a marital asset subject to equitable distribution in a Florida divorce? This was a question in the case Crocker v. Crocker, 5D23-103 (Fla. 5th DCA July 21, 2023).
In this divorce case, the former wife had an expert testify at trial that the pre-age 62 Federal Employee Retirement System (“FERS”) Disability Retirement benefits the former husband was receiving was an asset subject to division. The expert based this opinion on the former husband’s benefits booklet, current materials from the Office of Personnel Management (“OPM”), and an attorney’s handbook which was referenced but not admitted into evidence at trial. The former husband did not object to the testimony or cross-examine the expert, and a final judgment was entered granting the former wife half of the former husband’s disability payments. The husband filed a motion for rehearing and for the first time argued that under Florida law, “employer disability benefits are considered nonmarital property and thus not subject to equitable distribution.” The trial court denied the motion after a hearing and noted the former husband’s failure to refute the expert’s testimony at trial. The former husband appealed.
The appellate court first noted “Under Florida Rule of Civil Procedure 1.530 and Florida Family Law Rule 12.530, trial courts have discretion to consider and address arguments raised for the first time in a motion for rehearing, in part to ‘prevent an injustice that would be caused by an error or omission by one of the lawyers.’ [internal citation omitted]. And, where a trial court exercises its discretion to address an argument raised for the first time on rehearing, the argument is considered preserved for appeal.” The court also noted “‘Generally speaking, an employer-sponsored disability pension does not constitute a marital asset subject to equitable distribution.’ Gibbons v. Gibbons, 10 So. 3d 127 (Fla. 2d DCA 2009). Instead, a spouse’s ‘disability benefits’ are considered income, section 61.046(8), Florida Statutes (2019), and may be considered for alimony purposes.”
The court further noted “In Weisfeld v. Weisfeld, 545 So. 2d 1341, 1346 (Fla. 1989), the Florida Supreme Court adopted an analytical approach to determining whether workers’ compensation benefits and personal injury damages awarded to a spouse are subject to equitable distribution. This approach was later applied to determining what portion of disability benefits are subject to equitable distribution. [. . .] The analytical approach requires ‘careful analysis’ of the ‘nature and purpose of the benefits at issue.’ [internal citation omitted] ‘[R]eaching a correct result relative to the equitable distribution of ‘disability benefits’ requires looking beyond labels to the character and purpose of the benefit under review.’ [citation omitted].”
The court concluded “Based on the application of Florida and federal law to the uncontroverted evidence in this case, the benefits at issue here are disability benefits and thus not subject to distribution because the character and purpose of these benefits is to replace Husband’s income lost from disability. No evidence supports the conclusion that these benefits were intended to ‘replace a retirement pension by providing support for the disabled worker and his family after he leaves the job.’”
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