Cohen v. Cohen

Brief Fact Summary.

Husband challenged a court of appeals decision awarding his wife an interest in his unvested retirement benefits upon divorce.

Synopsis of Rule of Law.

Marital property includes retirement benefits, both vested and unvested which accrue during the marriage.

Facts.

Pamela and Jay Cohen married on September 1, 1982, with Mr. Cohen finding employment with Nashville Metropolitan Fire Department. In April, 1987, the department began making monthly contributions to the retirement plan on Cohen’s behalf. In January 1992 Mrs. Cohen filed for divorce, and the trial court failed to award her any interest in her husband’s unvested retirement benefits. The Court of Appeals reversed.

Issue.

Was the Court of Appeals correct in determining that unvested retirement benefits are included as marital property?

Held.

The court was correct in awarding wife an interest in her husband’s retirement benefits.
An employee has a vested retirement right when the employee has completed the requisite term of employment needed to entitle him to receive retirement benefits at some future time. A vested right matures when an employee reaches retirement age and elects to retire. An unvested retirement account is when the time period requirements have not been fulfilled.

This Court concludes that the legislature intended to include unvested retirement benefits as marital property because the definition of marital property is virtually all inclusive in subsection A and subsection B does not exclude unvested retirement benefits. Furthermore, unvested benefits are not included in the definition of separate property.

This construction based conclusion is consistent with legislative intent. Furthermore, courts of other States are in accord with the decision. A spouse who is primarily a homemaker would be seriously disadvantaged by the inability to claim a portion of the retirement benefits accrued during the course of the marriage. Any difficulty is in dividing future benefits is aided by the use of elastic, equitable approaches, with most courts using either the present cash value method or the deferred distribution method.

Discussion.

The majority rule is exemplified in this case in that both vested and unvested retirement benefits may be distributable upon divorce.