In Re Marriage of Skaden

Summary

The spouses married in 1961 and separated in 1973. Gary had been a State Farm agent since 1965 under an agreement that paid termination benefits, as installments over up to five years, if it ended after two years or more, subject to conditions such as returning company property and not competing. The trial court called the benefits a mere expectancy of no value and awarded them to Gary as separate property. The Supreme Court reversed, holding the benefits were vested but immature deferred compensation, divisible as community property to the extent of their community character, and remanded for the trial court to choose between present valuation and reserving jurisdiction.

What it means for the financial analysis

Contract-based deferred compensation, such as agent termination or renewal payments, may need to be identified and apportioned between community and separate periods even when it is unmatured and conditional. The court left the choice between actuarial present value and a reserved-jurisdiction payout to the trial court's discretion and set no formula, so the analysis should support whichever approach the facts allow.

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