Division of Military and Veteran’s Disability Benefits by Contract
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Mansell presented a single issue for review: whether California could divide the husbandís benefits under a theory of community property or equitable distribution. While a separation agreement was present on the facts, the California courts did not rely upon the agreement in deciding the case, and the effect of the agreement was therefore not within the scope of the issues appealed.
The Supreme Court stated this fact in footnote 6 of its opinion. That footnote observed that any attempt to divide veteranís disability benefits by contract would raise issues in 38 U.S.C. 5301(a) (1994), which prevents contractual assignments of such benefits. 490 U.S. at 586 n.6. Because the contractual issue was not presented, however, the Supreme Court found no need to consider 5301(a). There is, accordingly, no Supreme Court precedent on the question of whether veteranís or military disability benefits can be divided by contract.
In determining whether a division by contract is permitted, the first step is to consider the issue which Mansell refused to address: whether a division is prohibited by 5301(a). The Supreme Court has already noted that disability benefits are intended to benefit the disabled veteran and his or her family, and on this basis held that the statute does not bar the division of disability benefits as child support. Rose v. Rose, 481 U.S. 619 (1987).
A majority of state courts holds on similar grounds that federal law does not prevent a state court from enforcing a contractual division of disability benefits. See Poullard v. Poullard, 780 So. 2d 498, 500 (La. Ct. App. 3d Cir.), writ. denied, 790 So. 2d 641 (La. 2001) (consent judgment; "[n]othing in either the state or federal law prevents a person from agreeing to give a part of his disability benefit to another"); In re Marriage of Stone, 274 Mont. 331, 908 P.2d 670 (1995); Hoskins v. Skojec, 265 A.D.2d 706, 696 N.Y.S.2d 303 (3d Depít 1999); White v. White, ___ N.C. App. ___, 568 S.E.2d 283, 285 (2002) (Mansell "does not prohibit military spouses from contracting away their disability benefits"); Price v. Price, 325 S.C. 379, 480 S.E.2d 92 (Ct. App. 1996); McLellan v. McLellan, 33 Va. App. 376, 533 S.E.2d 635 (2000).
A minority of state courts holds that federal law does prevent a division by contract. See Ex parte Billeck, 777 So. 2d 105 (Ala. 2000); Abernethy v. Fishkin, 699 So. 2d 235 (Fla. 1997). Neither court showed any awareness of the most significant limitation upon the scope of Mansell the fact that the husband lost on remand, and the Supreme Court denied a second petition for certiorari. This fact suggests that the scope of the reported Supreme Court decision is limited, and that state courts should apply the decision carefully.
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