Lorenzen v. Lorenzen
294 Neb. 204
| Neb. | 2016Background
- David and Jennifer Lorenzen married in 1991; divorce filed by Jennifer in 2013. Issues at trial included division of retirement plans.
- Jennifer worked in jobs covered by Social Security and had retirement accounts; she paid Social Security taxes and would be eligible for Social Security benefits.
- David was a Lincoln firefighter hired in 1990 and did not pay Social Security taxes; he participated in a city police/fire pension plan and made additional optional contributions after 1995.
- Parties agreed on most property matters but disputed treatment of the marital portion of David’s pension.
- David argued that pension amounts contributed in lieu of Social Security should be treated as his separate property (not divisible) because they served as a Social Security substitute; trial court included the entire marital portion in the marital estate and equally divided marital property.
- David appealed only the characterization of his pension portion; the Nebraska Supreme Court affirmed the trial court.
Issues
| Issue | Lorenzen (Plaintiff/Appellant) Argument | Lorenzen (Defendant/Appellee) Argument | Held |
|---|---|---|---|
| Whether pension contributions made in lieu of Social Security are nonmarital | David: amount attributable to contributions in lieu of Social Security should be his separate property and excluded from marital estate | Jennifer: marital portion earned during marriage is divisible; Social Security benefits are excluded but pension is a distinct marital asset | Court: rejected David’s claim; marital portion earned during marriage is included in marital estate and divisible |
| Whether treating part of pension as equivalent to Social Security would be permitted despite federal law | David: this is not a direct offset of Jennifer’s Social Security, but an exclusion of his own contributions | Jennifer: such exclusion functions as an offset and is impermissible under federal law and precedent | Court: treatment would effectively offset hypothetical Social Security benefits and is prohibited; not allowed |
Key Cases Cited
- Webster v. Webster, 271 Neb. 788 (2006) (Social Security benefits not subject to direct division and federal anti-assignment provision precludes direct offset in property division)
- Coufal v. Coufal, 291 Neb. 378 (2015) (standard of review and treatment of pension properties in marital estate)
- Despain v. Despain, 290 Neb. 32 (2015) (three-step process for equitable property division under § 42-365)
- Millatmal v. Millatmal, 272 Neb. 452 (2006) (general range for equitable division of marital estate)
- In re Marriage of Mueller, 2015 IL 117876 (2015) (Illinois Supreme Court: cannot reduce pension by hypothetical Social Security benefits; § 407(a) bars using legal process to reach Social Security benefits)