Opinion ID: 2639221
Heading Depth: 2
Heading Rank: 1

Heading: Distribution of Disability Insurance Benefits

Text: [¶ 7] The husband claims the trial court abused its discretion when it included the benefits from the disability policy in the property distribution. He argues first that the disability benefits should not have been included because they were not property which was the product of the marital union acquired during the course of the marriage by the joint efforts of the parties as Wyo. Stat. Ann. § 20-2-114 (LexisNexis 2001) has been interpreted to require. France v. France, 902 P.2d 701, 704 (Wyo.1995). He further argues that the disability benefits were separate property not subject to division under Wyo. Stat. Ann. § 20-1-201 (LexisNexis 2001). [1] [¶ 8] Addressing the latter statute first, this court has repeatedly held that a married person's separately owned property, like jointly owned property, is subject to distribution in a divorce action. Mann v. Mann, 979 P.2d 497, 499 (Wyo.1999). Even assuming, therefore, that the husband properly characterizes the benefits from the disability insurance policy as separate property, they were subject to division by the trial court in the same manner as the parties' jointly owned property. [¶ 9] We turn next to the question of whether the trial court properly included the benefits from the disability insurance policy as property subject to equitable distribution under § 20-2-114, which provides: In granting a divorce, the court shall make such disposition of the property of the parties as appears just and equitable, having regard for the respective merits of the parties and the condition in which they will be left by the divorce, the party through whom the property was acquired and the burdens imposed upon the property for the benefit of either party and children. The court may decree to either party reasonable alimony out of the estate of the other having regard for the other's ability to pay and may order so much of the other's real estate or the rents and profits as is necessary be assigned and set out to either party for life, or may decree a specific sum be paid by either party. The husband correctly asserts that, under this statute, the property subject to division consisted of property which was the product of the marital union and was acquired during the course of the marriage by the parties' joint efforts. France, 902 P.2d at 704. Applying this standard, we said in France that it was not an abuse of discretion to award the wife property she had received as a gift or by inheritance from her parents. Id. However, we do not find that holding to be particularly relevant to the facts of this case given that we are not concerned here with a gift or inheritance but are concerned with benefits from a disability policy paid for out of the marital estate during the marriage. [¶ 10] In determining whether those benefits were properly included in the property to be divided, we look first to that portion of the benefits received by the husband before the divorcebenefits totaling $189,000, of which $75,000 was awarded to the wife. We hold the trial court did not abuse its discretion in making that award to the wife. Under the facts presented here, that portion of the disability payments from the insurance policy received by the husband prior to the divorce substituted for income he would have otherwise earned and was the product of the marital union and was acquired during the course of the marriage by the joint efforts of the parties. Id. [¶ 11] We consider next whether disability payments which the insurance policy will provide to the husband until he turns sixty-five were properly included in the property division. In concluding that such payments should be included, the trial court said: 14. Due to the length of the marriage, the fact that ... the parties['] assets were accrued exclusively during the marriage, and the fact that both parties are, for all practical purposes, retired, the Court finds that the parties' incomes should be made as nearly equal as possible in a property division so that they will be left in similar economic circumstances after the marriage. In light of the evidence presented, dividing the benefits of the disability policy yet to be received provided the means for leaving the parties in similar economic circumstances after the divorce. [¶ 12] Despite the trial court's stated purpose, the husband argues the future disability payments were not subject to division because they were not received during the marriage. The husband likens the benefits to money a spouse earns subsequent to divorce. The husband's analysis fails to take into account the fact that these payments will be derived from an insurance policy paid for by his professional corporation during the marriage from funds which otherwise could have been used for family living expenses or invested for the family's benefit. In this sense, the disability benefits are not like earnings post-divorce, which have no relation to the marriage. [¶ 13] The husband's analysis also fails to take into account that Wyoming law gives the trial court broad discretion in divorce actions to arrive at a just and equitable property distribution based upon the evidence before it. Wyoming law also authorizes the trial court to award alimony, although we have recognized that a property award is a preferable modern substitute for alimony. Belless v. Belless, 2001 WY 41, ¶ 8, 21 P.3d 749, ¶ 8 (Wyo.2001). If the intent is to adjust the equities between the parties at the time of the divorce, as was the case here, property division, which may encompass a series of payments, is the preferable method. Id. In evaluating the question of whether a property division by the trial court is, in fact, just and equitable, we must analyze the situation from the perspective of the overall distribution of the marital assets and liabilities rather than narrowly focusing on the effects of the disposition of any one particular asset. Neuman v. Neuman, 842 P.2d 575, 579 (Wyo.1992). Here, the trial court could have awarded the wife a greater percentage of some other asset in lieu of one-half of the disability payments. However, we cannot conclude that failure to do so was an abuse of discretion. Other considerations, such as liquidity and problems with dividing other property, may well have played a part in the court's decision. [¶ 14] Moreover, in dividing property, the trial court must assess the parties' respective needs and the merits of their positions. Mann, 979 P.2d at 499-500. In reviewing the trial court's determinations in this regard, The function of this court is not to constitute a reconsideration or retrial of the district court's decision unless the same is clearly unjust and inequitable. Kane v. Kane, ... 577 P.2d 172, 174 [ (Wyo.1978) ]. The trial court exercises a broad discretion in adjusting the rights and obligations of parties upon the dissolution of their marriage. We will not disturb the decision of the lower court unless we can say that that discretion was abused, that the result was clearly unjust and inequitable. Grosskopf v. Grosskopf, 677 P.2d 814, 823 (Wyo.1984). Considering all the facts and circumstances of this case, the parties' respective education and employment backgrounds, the length of their marriage, their respective contributionsboth economic and noneconomicto their home and family during the marriage, and their age and current financial circumstances, we cannot say the result reached by the trial court in this case was clearly unjust and inequitable. We, therefore, affirm the property distribution, including the division of disability benefits. [¶ 15] In reaching this result, we are aware that other courts have held disability benefits are not marital property and are not subject to distribution upon divorce. See Gragg v. Gragg, 12 S.W.3d 412 (Tenn.2000), for a discussion of the various approaches courts have taken on the subject. However, this other precedent does not address the particular facts of this case, and, given Wyoming's statutory scheme and prior case law, we decline to adopt a hard and fast rule that all disability benefits are, or are not, marital property subject to distribution. Rather, the courts must make a determination on a case-by-case basis according to the particular facts giving careful consideration to the entire marital property and keeping an eye toward a just and equitable distribution. We are satisfied from the record before us that the trial court accomplished that end.