Awarding Military Retirement Benefits in Divorce in Alabama

The Alabama Court of Civil Appeals has used an unusual inference to sustain a division of military retirement plans in an Alabama divorce.

The case is Powe v. Powe, Case No. 2080557 (Ala. Civ. App. November 20, 2009). The parties divorced after a 23-year marriage, and the trial court awarded the wife $500 per month from the husband’s military retirement, which at the time of the division equaled $1,428 per month.

Black letter law on the division of retirement plans in an Alabama divorce is that the party requesting a division must establish the present value of the retirement benefit. Wilson v. Wilson, 941 So. 2d 967 (Ala. Civ. App. 2005);  McAlpine v. McAlpine, 865 So. 2d 438 (Ala. Civ. App. 2002). This works more often to bring about injustice (when the unknowing lawyer of a divorcing party fails to jump through all the necessary hoops) than it does to bring about justice, but that’s not the point of this post.

The husband in Powe made two arguments about the retirement plan division, first that the wife failed to establish the present value of his retirement plan and that she failed to establish the amount that had accrued during their marriage. Because he had failed to argue the issue of accrual during the marriage, the appeals court declined to address that issue, leaving only the question whether the wife had failed to establish the present value of the husband’s retirement.

Powe is at once both simpler and more complex than many retirement plan cases, simpler because the husband was already receiving retirement benefits, so there was an ascertainable monthly payment, and more complex because a portion of each month’s check represented disability benefits, which the appeals court said are not divisible in divorce. The appeals court relied on Campbell v. Campbell, Case No. 2070724 (Ala. Civ. App. April 24, 2009) to establish that the present value of retirement benefits “was proved by establishing the amount of monthly benefits the retiree was receiving.”

In wrestling with the mix of retirement and disability benefits, the appeals court noted that the husband’s total pension payment was $1,428 per month and that his tax return showed taxable pension benefits of $1,085 per month. “The remainder of the husband’s $ 1,428 in benefits, then, must be disability benefits, which are not taxable.” Powe at 5. This assertion, while probably accurate, is also apparently unsupported by any evidence in the record and is therefore a bold and surprising inference from a court that makes much of its frequent refusal to act on anything not included in the record before it.

Once having cleared this hurdle of the division between retirement and disability, the appeals court had no trouble with the last piece. Having “ruled” that the husband’s retirement benefits (as opposed to disability) were $1,085, the court found that the $500 the trial court awarded the wife was less than 50% of the husband’s benefit. “Because the husband failed to argue to the trial court that § 30-2-51(b)(2) [dealing with the division of the portion of retirement plans accruing before the marriage] barred an award of his military-retirement benefits to the wife, we must affirm the award of $ 500 per month in military-retirement benefits to the wife.” Powe at 5.

Come to think of it, maybe the Powe ruling does have something to do with the injustice of the Wilson/McAlpine principle after all. Perhaps the appeals court is leaping across inferential moats because it perceives (probably correctly) that the smoothest way to restore a measure of justice to retirement plan division in Alabama divorces is to chip away at the principle one ruling at a time rather than to overturn it expressly.