Proving the Present Value of Retirement Benefits

The Alabama Court of Civil Appeals has reversed an award of retirement benefits from the husband to the wife in a divorce, because the wife did not prove the present value of those benefits at trial. In Wilson v. Wilson, Case No. 2030896 (Ala. Civ. App. March 18, 2005), the trial court had awarded the wife 50% of the husband’s military retirement, even military retirement he would earn after the divorce. The appeals court rejected the husband’s argument that this award violated Ala. Code 30-2-51(b)(2) (which precludes sharing of retirement earned prior to marriage) because he hadn’t raised it at trial.

The Court of Appeals reversed, however, because the wife had not provided evidence of the present value of the husband’s retirement plan. The Court said the wife “failed to produce sufficient evidence of the present value of the husband’s retirement benefits. The only evidence adduced at trial regarding the value of the husband’s retirement benefits was the husband’s own testimony that, at some point before trial, he had received a statement estimating his monthly retirement benefit as $ 1,250 at age 60. Given the wife’s failure to present sufficient evidence of the present value of the husband’s retirement benefits, we must reverse the trial court’s award of retirement benefits.” In so ruling, the Appeals Court relied on Applegate v. Applegate, 863 So. 2d 1123 (Ala. Civ. App. 2003) and McAlpine v. Mcalpine, 865 So. 2d 438 (Ala. Civ. App. 2002).

Judges Murdock and Crawley provide a lively debate in their separate concurrences. Murdock laments that rulings like that in Wilson will impose an onerous financial burden on every claimant for retirement benefits:

The practical problem with this court’s holdings in Applegate v. Applegate, 863 So. 2d 1123 (Ala. Civ. App. 2003), and McAlpine v. McAlpine, 865 So. 2d 438 (Ala. Civ. App. 2002), particularly with respect to cases involving what are known as “defined benefit plans,” see Wilkinson v. Wilkinson, [Ms. 2011255, April 16, 2004] So. 2d , (Ala. Civ. App. 2004) (Yates, P.J., concurring in the result), is that they put the trial court and/or the parties to the time, the effort, and the expense of retaining accounting or actuarial experts and preparing, presenting, and evaluating technical and complex evidence as to the present value of retirement benefits in every case. See id. Obviously, the lower the value of the benefits and other marital property that make up the marital res, the greater will be the relative burden imposed by this requirement.

In his separate concurrence, Judge Crawley rejected this argument. He said the statute’s language is unambiguous and that it’s not within the court’s “purview” to be concerned about what compliance might cost.

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