California Marital Settlements: June 1997 Summary

Legal Developments

Recent Cases Affecting Retirement Benefits

The United States Supreme Court ruled on June 2, 1997 that ERISA preempts state community property laws, which allow a nonparticipant spouse to transfer by testamentary instrument an interest in undistributed pension plan benefits. (Boggs v. Boggs (1997) __ U.S. __, __ S.Ct. __, __ L.Ed.2d __, 97 DJDAR 6882) Although the case did not involve a marital dissolution, it clearly undermines the reasoning used in cases like In re Marriage of Shelstead (1996) 50 Adv.Cal.App.4th 1579, 58 Cal.Rptr.2d 522 [Review granted 2/26/97] [An alternate payee under a QDRO may name a successor in interest for benefits payable provided that the mechanism for determining the identity and address of the alternative successor is set forth.]

A second recent retirement case addressed the advisability of broad retention of the court's jurisdiction. If you represent the nonemployee spouse ("alternate payee"), it may well be advisable (even if a pension order or QDRO is entered) to include a paragraph reserving jurisdiction over plan benefits until such time as the benefits are in pay status and all parties are satisfied that the benefits are appropriately divided. In the case of In re Marriage of Gowan (1997) 54 Cal.App.4th 80, 62 Cal.Rptr.2d 453, 97 DJD.AR 4591, the court interpreted its retained jurisdiction to permit it to divide a pension that the employee spouse drastically increased in value due to his post-divorce reentry to employment under the plan, resulting in a 13-fold increase in the value of the nonemployee spouse's community interest.

Additional Cases Interpret Burgess

Although it is still unclear how strictly In re Marriage of Burgess will be applied by trial courts and courts of appeal, there have been several published opinions that have split on whether the custodial parent would be allowed to move with the child. In re Marriage of Whealon (1997) 53 Cal.App.4th 132, 61 Cal.Rptr.2d 559 held that the burden was on the noncustodial parent who only had visitation rights to show that the changed circumstances accompanied by the custodial parent's move required a change of custody. Similarly, Ruisi v. Thieriot (1997) 53 Cal.App.4th 1197, 62 Cal.Rptr.2d 766 held that, in light of Burgess, the question for the trial court on remand was not whether the custodial parent would be permitted to move; the question was what custody arrangement should be made thereafter. In Cassady v. Signorelli (1996) 49 Cal.App.4th 55, 56 Cal.Rptr.2d 545, on the other hand, a trial court's decision was affirmed, which denied a custodial parent the right to move with her child when she had no plans for employment and the move seemed designed to frustrate the father's visitation.