Opinion ID: 852210
Heading Depth: 2
Heading Rank: 1

Heading: The Health Insurance Benefits Are Property.

Text: When a trial court dissolves a marriage, it must divide the property of the parties between them. Ind.Code § 31-15-7-4(a). For the purposes of such a dissolution, property means all assets of either party or both parties, including: (1) a present right to withdraw pension or retirement benefits; (2) the right to receive pension or retirement benefits that are not forfeited upon termination of employment or that are vested (as defined in Section 411 of the Internal Revenue Code) but that are payable after the dissolution of marriage; and (3) the right to receive disposable retired or retainer pay (as defined in 10 U.S.C. § 1408(a)) acquired during the marriage that is or may be payable after the dissolution of marriage. Ind.Code § 31-9-2-98(b) (emphasis added). The trial court may divide the property by awarding parts of the property to one of the parties and requiring either party to pay an amount to the other to achieve a just and proper distribution. Ind.Code § 31-15-7-4(b)(2). Anne argues that health insurance premiums being paid for Charles constitute retirement benefits that Charles earned during marriage, so the trial court should have included them in the marital property subject to division. (Appellant's Br. at 2.) She further argues that Navistar's paying premiums on Charles's behalf is analogous to a retirees receiving pension benefits. (Appellant's Br. at 3-4.) Finally, Anne argues that because Charles's right to his health insurance benefits had vested, the premium payments are analogous to vested pension benefits. (Appellant's Br. at 4.) Charles responds that his health insurance premiums do not constitute marital assets because he cannot transfer or alienate his health insurance benefits, nor did he choose to receive them in lieu of a larger monthly stipend under his pension plan. (Appellee's Br. at 4.) Charles also argues that the value of the premiums is speculative because of the possibility that Navistar may someday file for bankruptcy or cancel his health insurance benefits. (Appellee's Br. at 4.) Framing the question as whether the premiums constitute property misconceives the question. Rather than analyze whether Charles's health insurance premiums constitute retirement benefits within the meaning of subsection (2), we think it plain enough that Charles's health insurance benefits constitute an intangible asset. The phrase all assets is broadly inclusive and is not limited to the list of examples that follows it. See Beckley v. Beckley, 822 N.E.2d 158, 163 (Ind.2005) (holding lump sum payment for lost wages and pain and suffering was an asset to the extent it compensated for pain and suffering). It has been customary to view the statute's list of examples simply as instances falling within the ambit of all property rather than as suggestions that all is somehow less than all-inclusive. [2] See, e.g., Helm v. Helm, 873 N.E.2d 83 (Ind.Ct.App. 2007) (lottery payments); Henry v. Henry, 758 N.E.2d 991 (Ind.Ct.App.2001) (stock options); Sedwick v. Sedwick, 446 N.E.2d 8 (Ind.Ct.App.1983) (structured settlement annuity). Whether a right to a present or future benefit constitutes an asset that should be included in marital property depends mainly on whether it has vested by the time of dissolution. Compare Hill v. Hill, 863 N.E.2d 456, 460-61 (Ind.Ct.App. 2007) (holding pension plan was an asset when party was receiving payments at time of dissolution); with Bizik v. Bizik, 753 N.E.2d 762, 767-68 (Ind.Ct.App.2001) (holding retirement plan was not an asset when it had not vested by time of dissolution). In other words, vesting is both a necessary and sufficient condition for a right to a benefit to constitute an asset. See Helm, 873 N.E.2d at 88 (The common denominator . . . is whether the interest in the future payment is vested.). A right to a benefit can vest either in possession or in interest. In re Marriage of Preston, 704 N.E.2d 1093, 1097 (Ind.Ct.App.1999) (Vesting in possession connotes an immediate[ly] existing right of present enjoyment, while vesting in interest implies a presently fixed right to future enjoyment.). Vested pension rights represent `intangible assets of a spouse [that] have been earned during the marriage, either through the contributions of the spouse [that] otherwise would have been available as assets during the marriage, or through contributions of the employer [that] constitute deferred compensation.' Preston, 704 N.E.2d at 1097 (quoting 2 Homer H. Clark, Jr., The Law of Domestic Relations in the United States § 16.6, at 208 (2d ed.1987)). A similar theory explains why disability payments received after a marriage dissolution are not assets for the purposes of a marriage dissolution. Leisure v. Leisure, 605 N.E.2d 755 (Ind.1993) (holding workers' compensation payments were not assets to the extent they replaced lost future wages after marriage dissolution); see also Beckley, 822 N.E.2d at 162 (holding person did not have a vested interest in future wages). The exception to this rule occurs when a party purchases or contributes to disability insurance with marital assets, namely, wages in which the party had a present interest. Gnerlich v. Gnerlich, 538 N.E.2d 285, 286 (Ind.Ct.App. 1989). Vesting also explains our holding that employer-provided group term life insurance is not an asset. Tallent, 445 N.E.2d at 991 (Ind.1983). In Tallent a husband changed the beneficiary on his life insurance policy from his wife to his mother after his wife filed to dissolve their marriage and just before he committed suicide. Id. The husband was subject to an order restraining him from disposing of his property, but we held that the life insurance policy was not an asset of the husband's. Id. The beneficiary, not the insured, had `a defeasible vested interest in the policy, a mere expectancy, until after the death of the insured.' Id. at 992 (quoting Bronson v. Northwestern Mut. Life Ins. Co., 75 Ind.App. 39, 129 N.E. 636, 639 (1921) (emphasis in original)). We think Charles's health insurance benefits constitute an asset in the plain meaning of the word. Charles has a right to the medical services his health insurance will cover for the rest of his life. Because Navistar has assumed a monthly liability that Charles would otherwise have had to bear, Charles's health insurance benefits more closely resemble a right to future pension payments, which the Court of Appeals described as an intangible asset in Preston. 704 N.E.2d at 1097. Unlike the term life insurance in Tallent the policy holder of which was not the same person as the beneficiary, the health insurance in this case benefits the same party to the marriage dissolution who owns the policy. 445 N.E.2d at 991. Most importantly, Charles's health insurance benefits have vested. The parties did not dispute that Navistar was paying Charles's premiums at the time of dissolution. As a result, Charles had a present right to enjoy his health insurance benefits. Moreover, the parties did not even dispute that Charles's health insurance benefits were not subject to divestiture in future years. Tallent is doubly not on point because the beneficiary in that case had an interest that was defeasible. 445 N.E.2d at 992. Charles's principal argument is that his health insurance benefits cannot constitute an asset because he cannot transfer or alienate them. (Appellee's Br. at 4.) As a result, Charles could not dispose of his health insurance benefits to generate cash to pay Anne in order to achieve a just and proper distribution. This illiquidity is relevant to the value a trial court may assign to an asset, but not to whether benefits constitute an asset in the first place. See Part II, infra. Charles further argues that his health insurance benefits cannot constitute an asset because their value is speculative. As a result, Charles may have to pay Anne more to retain the asset than his share ends up being worth. As with illiquidity, however, the fact that a person bears the risk of future changes in value is relevant to the present value a trial court may assign to an asset, but not to whether benefits constitute an asset in the first place. See Part II, infra.