Olson v. Olson, 880223

• Citation: 445 N.W.2d 1
• Decision Date: 17 July 1989
• Docket Number: No. 880223,880223
• Parties: Constance Joanne OLSON, Plaintiff and Appellee, v. Gerald Emil OLSON, Defendant and Appellant. Civ.
• Court: United States State Supreme Court of North Dakota

Page 1

445 N.W.2d 1

27 Soc.Sec.Rep.Ser. 279

Constance Joanne OLSON, Plaintiff and Appellee, v. Gerald Emil OLSON, Defendant and Appellant.

Civ. No. 880223.

Supreme Court of North Dakota.

July 17, 1989.

As Corrected Oct. 25, 1989.

Keith Jerome Trader, Fargo, for plaintiff and appellee.

John Billy Hansen, by Donald R. Hansen, Fargo, for defendant and appellant.

MESCHKE, Justice.

Gerald Olson appealed from a decree of divorce from Constance Olson. While he addressed many financial facets of the decree, Gerald principally sought coordinated treatment of his state highway patrol retirement fund with her federal social security benefits. We affirm the trial court, confirming that social security should not be considered in dividing marital property.

FACTS

Gerald, age 48, and Constance, age 49, were divorced in 1988 after 23 years of marriage. They had three children: Carrie, born in 1968; Lisa, born in 1970; and Jason, born in 1973. Throughout the marriage, Constance worked for optical companies and Gerald worked for the state as a highway patrolman.

Constance was eligible for social security; Gerald was not. In lieu of social security coverage, Gerald and the state contributed larger amounts to his account in a retirement fund. ¹ At the divorce, Gerald's retirement account was valued at $40,137.18 before taxes. An expert for Gerald testified that, in his opinion, Constance's social security was presently worth $18,760, assuming that her benefits began at age 65 and that she lived to age 81.

The trial court placed custody of the minor children with Constance and ordered Gerald to pay $400 per month in child support until Jason turns eighteen. Gerald was authorized "to take the federal tax deduction for the minor children." The trial court ordered that "[Constance] as trustee shall hold the remaining certificates of deposit ... presently held in joint tenancy [with her children] for her children's college fund."

No spousal support was awarded. Most of the property was divided equally, with each receiving their separate farm property, Individual Retirement Accounts, and vehicles. The trial court awarded Gerald his highway patrol retirement account as part of his share of marital property, but ruled that "[s]ocial security benefits of either party shall not be considered in this matter."

On appeal, Gerald argued that child support was excessive and that the joint certificates of deposit were marital property, rather than an educational trust for the children. Gerald also argued that the property division was inequitable for several reasons, arguing particularly that his retirement account was improperly included as marital property, that Constance's social security was improperly excluded, and that part of the value of his retirement fund should have been offset by the value of Constance's social security.

CHILD SUPPORT

Gerald argued that $400 per month child support for Jason was excessive because it was higher than the child support guidelines published by the Department of Human Services. In another child support case, we rejected a like argument:

"Burgess [the father] complains that the guidelines were 'ignored' in awarding more than the guidelines suggested without adequate explanation. This argument equates the guidelines to fixed or maximum amounts, rather than the 'suggested minimum contributions' plainly contemplated by the legislature. Administrative discretion has not been substituted for judicial discretion." Matter of Kary, 376 N.W.2d 320, 321 (N.D.1985).

In its discretion, a trial court may award child support exceeding published guidelines. ²

Child support is a finding of fact subject to review by the clearly-erroneous standard. Fleck v. Fleck, 427 N.W.2d 355, 357 (N.D.1988). Since Gerald had a significantly higher monthly income and since Constance had monthly expenses exceeding her salary, the addition of $400 to Constance's monthly income did little more than enable Constance to maintain a comparable standard of living for their child in her separate household. See Bagan v. Bagan, 382 N.W.2d 645, 648 (N.D.1986). We conclude that this award was not excessive.

CHILDREN'S EDUCATIONAL TRUST

Constance held three certificates of deposit, each jointly with an individual child: $2,000 with Carrie; $2,600 with Jason; and $3,000 with Lisa. Gerald argued that these were marital property because they had been purchased with money earned by Constance during the marriage and because they were held in her name. Constance argued that she did not consider them her property nor exercise control over them. Indeed, another certificate, which she held jointly with Jason and which she agreed was her money, was set aside to her in the property distribution. The trial court decreed that Constance hold the three certificates in trust as the "children's college fund."

We recently held that a parent's support obligation may extend beyond a child's eighteenth birthday. Freyer v. Freyer, 427 N.W.2d 348 (N.D.1988). In Davis v. Davis, 268 N.W.2d 769, 777-778 (N.D.1978), overruled on other grounds, Nelson v. Trinity Medical Center, 419 N.W.2d 886 (N.D.1988), we upheld a trial court's order requiring a non-custodial father to pay $10,000 per child into a trust for the children's college educations. Not all parents are able to afford to plan ahead for their children's college educations. Where they have done so, courts should foster it, not frustrate it. Therefore, we conclude that it was not clearly erroneous for the trial court to set aside these certificates as the "children's college fund."

PROPERTY DIVISION

Gerald complained that the property distribution was unfair because five bank and savings accounts totalling $23,755 were divided equally, thus exploiting those which he considered his separate property (though jointly held with Constance) because they had been accumulated from his farm income and from family gifts. Property worth over $100,000 was set aside to each. Nevertheless, Gerald complained that, not counting her social security, Constance received $6,000 more than he did.

The trial court's division of marital property is a matter of fact, reviewed by the clearly erroneous standard. Branson v. Branson, 411 N.W.2d 395, 396 (N.D.1987). The possibility of a different permissible division is not enough to convince us of error. Id. Division of marital property need not be exactly equal to be equitable. Fleck v. Fleck, 427 N.W.2d 355 (N.D.1988). Neither the source of ownership nor the title to property dictates distribution of an item of property to the spouse who acquired it during the marriage. Anderson v. Anderson, 368 N.W.2d 566 (N.D.1985). While inherited property should be set aside to the heir where fairly possible, Winter v. Winter, 338 N.W.2d 819 (N.D.1983), calculating its value into the marital equation is often equitable in long-term marriages. Behm v. Behm, 427 N.W.2d 332, 337 (N.D.1988). The disparity in the value of property distributed here was not so great that the division of all bank accounts equally was inequitable or unexplainable.

SOCIAL SECURITY

Gerald argued that it was inequitable to exclude Constance's social security from the reckoning of marital assets. Unaided by superficial and unhelpful briefs from both spouses, we must cautiously survey the relationship of the federal social security program to state marital property law. To begin, we examine the structure of the federal social security plan.

Upon satisfying the necessary age requirements, a fully insured social security retiree, a spouse, an ex-spouse who was married to the retiree for at least 10 years, and any dependent children are entitled to federal social security benefits. 42 U.S.C. §§ 402(a) to (f). Benefits are also available to insured workers who become disabled and to their dependents. 42 U.S.C. §§ 402(b) to (d). But "[t]he right to alter, amend, or repeal any provision of this [Social Security Act] is hereby reserved to the Congress." 42 U.S.C. § 1304. Thus, there are both pre-conditions to benefits and uncertainties in benefits.

The right of a person to future social security payment is non-transferable and non-assignable. 42 U.S.C. § 407(a). Social security rights are not "subject to execution, levy, attachment, garnishment, or other legal process...." Id. In 1975, this enjoinder from "legal process" was partially lifted for "child support" and "alimony." 42 U.S.C. § 659(a). ³ Then, in 1977, Congress confined the kind of "alimony" for which benefits are reachable by "legal process" to "periodic payments of funds for the support and maintenance of the spouse (or former spouse)" of an insured individual. 42 U.S.C. § 662(c) went on to declare explicitly:

"Such term [alimony] does not include any payment or transfer of property or its value by an individual to his spouse or former spouse in compliance with any community property settlement, equitable distribution of property, or other division of property between spouses or former spouses."

Congress prohibited the use of "legal process" to disperse social security for "equitable distribution of property, ... between spouses or former spouses." Id. Federal law has carefully limited a divorced spouse's ability to reach expected benefits of the other spouse through legal proceedings. ⁴

Interpreting this statutory scheme, the United States Supreme Court held that social security benefits were not an "accrued property right." Flemming v. Nestor, 363 U.S. 603, 80 S.Ct. 1367, 4 L.Ed.2d 1435 (1960):

"[E]ach worker's benefits, though flowing from the contributions he made to the national economy while actively employed are not dependent on the degree to which he was called upon to support the system by taxation. It is apparent that the noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments." Id., at 609-10, 80 S.Ct....