The permissibility of dividing social security benefits in a Judgment of Divorce

In Biondo v Biondo, __ Mich App __ (Unpub, #294694, 3/15/2011) the Court of Appeals held that the circuit court may consider the parties’ anticipated social security benefits as one factor, among others, to be considered when devising an equitable distribution of marital property. But, in endeavoring to divide the marital estate, the court may not treat social security benefits as tantamount to a marital asset. Instead, the circuit court may take into account, in a general sense, the extent to which social security benefits received by the parties affect the Sparks factors.

Although federal law does not preempt laws governing divorce or domestic relations, a legal arena belonging to the states rather than the United States. Hisquierdo v Hisquierdo, 439 US 572, 581; 99 S Ct 802; 59 L Ed 2d 1 (1979), the federal interest in social security benefits preempts enforcement of a Judgment of Divorce and the parties’ agreement therein to equalize their social security benefits.  Application of social security benefits for marital property purposes remains specifically excluded from this exception, as Congress declared in 42 USC 659(i)(3)(B)(ii) that the term “alimony” does not encompass “any payment or transfer of property or its value by an individual to the spouse or a former spouse of the individual in compliance with any community property settlement, equitable distribution of property, or other division of property between spouses or former spouses.” Therefore, the circuit court erred by enforcing the consent judgment’s social security provision.