Case Title: Milligan v. Milligan

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1991-12-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 101 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 89-589


 Nancy A. Muller Milligan                     Supreme Court

                                              On Appeal from
      v.                                      Windham Superior Court

 William M. Milligan                          December Term, 1991



 Richard W. Norton, J.

 William M. McCarty and Benjamin S. McCarty of McCarty Law Offices,
   Brattleboro, for plaintiff-appellee

 Bruce M. Lawlor of Lawlor & Polidor, P.C., Springfield, for
   defendant-appellant


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      DOOLEY, J.   Defendant, William Milligan, appeals the judgment in this
 divorce case, arguing that the superior court (1) had no authority to order
 him to terminate his qualified tax-shelter annuity; (2) improperly ordered
 that some of the annuity's proceeds be placed in a trust fund to defray
 educational costs of his adult children; and (3) improperly awarded
 attorney's fees to plaintiff, Nancy Milligan.  We affirm the order to ter-
 minate the annuity and the attorney's fees award; we reverse the order to
 create the educational trust and remand.
      In December 1989, the court issued a decree of divorce on the grounds
 that the parties had lived apart for more than six months.  The parties,
 married in 1966, have three daughters, who were twenty-one, twenty, and
 fifteen years of age at the time of the decree.  Defendant was a hospital
 administrator and earned approximately $90,000 annually in salary and
 benefits at the time of the order.  Plaintiff was a graduate student in
 anthropology and earned an annual stipend of approximately $4,500, while
 expecting to earn approximately $30,000 annually after receiving her
 doctorate in 1993.  The parties' most substantial assets were the marital
 home, found by the court to be worth $150,000 with a mortgage of $28,000,
 and three { 403(b) qualified tax-shelter annuities held by defendant.  See
 26 U.S.C.A. { 403(b).  The annuity accounts, consisting of regular
 contributions made by defendant and his employer in lieu of salary, were
 worth approximately $190,000.
      The trial court awarded the marital home, subject to mortgage and
 taxes, to plaintiff.  The court determined that the annuities were marital
 property and awarded two of the accounts to defendant.  It ordered that
 defendant liquidate the third annuity, with an approximate value of $70,000,
 and pay any taxes or penalties resulting from the early withdrawal of the
 funds.  The proceeds of the account were to be distributed in three ways:
 first, to reimburse the parties for expenses incurred by each during the
 breakup of the marriage; second, to discharge certain financial obligations
 of the parties; and third, to the extent any funds remained, to establish a
 trust, the income and corpus of which would be used to help pay educational
 expenses for the three children "until each obtains a baccalaureate degree
 or discontinues pursuit of a college degree, or until the fund is
 exhausted."  The order placed approximately $13,000 in the educational
 trust.  Any money remaining in the trust after its termination was to be
 divided equally between the parties.  The court awarded plaintiff $13,000 in
 attorney's fees, the amount it found she had incurred, and ordered defendant
 to pay $8,000 of those fees to plaintiff's counsel by February 1, 1990.
      Defendant argues first that the court did not have the authority to
 order him to terminate the pension fund annuity.  In support of this
 position, he first asserts that the pension is not marital property and
 cannot be distributed.  He claims that the court reached the extent of its
 power in considering the existence of the pensions as a factor in
 distributing other property pursuant to 15 V.S.A. { 751(b).
      We have affirmed trial court orders that used the approach defendant
 seeks in Victor v. Victor, 142 Vt. 126, 129,