Appeal from Superior Court of King County. Docket No: 94-3-04213-4. Date filed: 06/13/95. Judge signing: Hon. John M. Darrah.
PER CURIAM. George and Wanda Redford were granted a decree of dissolution after twenty-three years of marriage. Under Washington case law, vested and mature retirement benefits must be valued as of the date of dissolution not at some future date. Here, the trial court awarded Wanda the equity in the family home and granted George his vested retirement benefits which were of equal value. Finding that George was unlikely to retire and therefore to obtain immediate payment of his benefits, the court awarded him a lien on the home which increased each year that he continued working. We agree with Wanda that by doing so, the court based its distribution on the future value of George's retirement benefits not its present value. Accordingly, we reverse. George's request for attorney fees is denied.
At trial, George was 56 and Wanda was 50 years old. They have no dependent children. Wanda is a registered nurse. According to Wanda, she has a net monthly income of $2495. George has been an equipment service operator at Northwest Airlines for the last 30 years. He claims his net monthly income is $2829.
The parties had three main assets: (1) the family home with $75,254 in equity; (2) George's retirement benefits; and (3) Wanda's retirement accounts worth approximately $12,000. Before trial, the parties stipulated that George's retirement plan was worth $75,292.11 if he retired at 56 and $32,572 if he waited until he reached 65. Wanda argued at trial that under In re Hurd *fn1, the court should accept the larger valuation because it was required to value George's retirement benefits assuming immediate not future retirement.
Because of the length of the marriage, the trial court desired to distribute the assets fifty-fifty. The $75,254 equity in the family residence was awarded to Wanda. The court valued George's retirement benefits at $75,292 and awarded the full amount to him. But because the court found that George was "unlikely to retire" in light of his financial obligations, and therefore unable to realize on his asset, the court decided to give George a lien against the house which would increase each year that he continued to work. The court entered the following findings:
1. The Court has no choice but to follow the decision of the Court of Appeals in In Re: Marriage of Hurd, 69 Wash. App. 38, 848 P.2d 185 (1993). The decision recites that the Court must value a party's retirement plan as of the date of earliest possible retirement if the party "may" retire. "May" is a permissive word. The decision of the Court might be different if the Hurd Court had used the words "could" or "can" in its opinion. The Court must, therefore, value the Respondent's pension as of the earliest retirement date.
5. The Court has a duty, in a long-term marriage, to leave the parties, upon dissolution of that marriage, equitably situated. The Respondent, given his financial obligations, will either have to keep working or take bankruptcy and is, therefore, unlikely to retire.
6. Taking into consideration the nature of the assets awarded to each party, in order to make a fair and equitable distribution, the Respondent will receive a lien against the house which lien will be payable on April 2, 2003 or within ninety (90) days of his earliest retirement, whichever event occurs soonest. The amount of that lien will, however, be increased with each year that he continues to work[.]
Wanda appeals from those findings.
Wanda claims that the court abused its discretion by awarding George a lien against her asset, the equity in the family home, based on its finding that George was unlikely to retire. She claims that by doing so, the court took into consideration George's future retirement rather than distributing the benefits assuming retirement as of the date of dissolution. Under the controlling case of In re Hurd *fn2, Wanda is right.
In Hurd, this court was asked to decide whether to value a vested and matured retirement pension assuming retirement as of the date of dissolution or at some future date. We held that where the pension is vested and matured, the asset is valued assuming an immediate retirement date.
Vested or matured benefits are property which must be allocated in a dissolution action.
Because Mr. Hurd may retire at any time and has an unconditional right to immediate payment of his pension upon his retirement, his pension is both a vested and a matured benefit. Therefore, the present value of Mr. Hurd's monthly pension should be determined assuming Mr. Hurd's retirement as of the date of dissolution, rather than at some future date. *fn3 Here, it was undisputed that George's retirement plan was a vested and matured benefit. And although the trial court valued the asset assuming George's immediate retirement, it violated the spirit of Hurd by then granting George a lien based on the finding that he was unlikely to retire. The end result is that the court based its distribution ...