In Re Marriage of Brown

Summary

The parties married in 1950 and separated in 1973. The husband had 72 of the 78 points needed to vest under his employer's noncontributory pension plan. The trial court, following French v. French, held the nonvested pension was not community property and did not divide it. The Supreme Court overruled French, held that nonvested pension rights are a contingent property interest and community property to the extent they derive from employment during marriage, and reversed and remanded. On remand the trial court is also to redetermine the stock purchase plan and shares.

What it means for the financial analysis

Pension rights earned during the marriage must be identified as a community asset even when they have not vested, so the community portion of a plan has to be quantified. The court allowed either a present value that accounts for the risk of non-vesting or a division of each payment as received, but it did not set a formula or determine the community share here.

Also available on CourtListener.