Avoiding Pitfalls - Defining the "Marital Portion"

Triplett v. Triplett, No. 2011-CA-002076-MR (Ky. App. 2013)
Assigning and Dividing Marital Property Under a Defined Benefit Pension

Rendered: July 5, 2013
Opinion Affirming

In this appeal arising from a dissolution of marriage action, Wife challenged the orders of the Jefferson Family Court related to the division of Husband’s pension, specifically the designation of marital and non-marital property, and the ultimate percentage award made to Wife.

Wife failed to preserve for appellate review her specific claim that the subtraction method, rather than a marriage coverture fraction, should have been used to identify the marital and non-marital portions of Husband's pension, as well as her calculation of value of Husband's pension plan at time of dissolution according to a “bright-line rule”.  In direct conflict, Wife argued before the trial court that a coverture fraction should have been used, and she relied upon a different calculation with respect to bright-line rule in her appellate brief than she used before trial court.

Confusing?  Yes.  But have no fear.  Since Wife failed to preserve her claims, the impact of the decision is fairly limited.  But there are still lessons to be learned. 

As a preliminary matter, practitioners must take heed when negotiating and drafting a property settlement agreement.  It is not enough to say that the “parties agree that the marital portion of said pension shall be awarded 50% to Petitioner and 50% to the Respondent.”  When the term “marital portion” is not defined in the agreement, it opens the door to protracted litigation when the proposed QDRO is later prepared.

There are various ways to assign and divide the marital/non-marital portions of a defined benefit pension.  Of course, each method will either be more or less advantageous to your client.  Under a defined benefit plan where the amount of retirement benefits is substantially related to the number of years of service, a marriage coverture fraction may be the best method of protecting the alternate payee’s interests.  Where a coverture fraction is the preferred method, whether in negotiating and drafting a property settlement, or when presenting your client’s case at trial, it is absolutely critical that the nature of the coverture fraction be understood, as drastic and unintended results can occur depending on the formula used.

This lesson could not have been made plainer than in Triplett.  The initial coverture fraction Wife presented to the trial court resulted in her seeking 27.5% of Husband’s pension.  Based on its own coverture formula, the trial court instead awarded Wife just 10%.  Of note, in her CR 59.05 motion, Wife sought an award of 13.91%, and on appeal sought 22%, both percentages based on alternative coverture formulas.  After years of litigation, the Court of Appeals affirmed the award of 10% to Wife, substantially less than she sought at any point during the litigation.

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