Court Modifies Maintenance To Include Pension Benefits Despite Waiver Of Husband’s Retirement Benefits in Marital Settlement Agreement

Usually upon the signing of a Marital Settlement Agreement and the entry of a Judgment for Dissolution of Marriage, the parties hope to never step foot into court again. However, there are circumstances in which the parties wish to lower or increase child support or maintenance based on a change in income. The problem arises in the recalculation of income and what constitutes income.

In In re the Marriage of Knutson, the parties entered into a Marital Settlement Agreement that allowed for maintenance in the amount of $3,100 per month. Furthermore, the wife was granted 50% of the marital portion of a pension which was already in payout status. At some point after the entry of their Judgment, the Husband filed a motion to terminate maintenance given his unemployment status. The court did not terminate the maintenance but instead reduced the maintenance, finding that the monthly pension amount constituted income for purposes of maintenance. The Husband argued that was improper as the pension included benefits from before the marriage. The Husband appealed, but the Appellate Court agreed with the trial court, finding that the trial court did not abuse its discretion in using the pension disbursements as income for maintenance. Furthermore, although the Wife waived any interest into his deferred compensation, there was no express waiver regarding his pension benefits.

The holding of this case seems unfair to me. In essence, the Court held that the wife would be granted 50% of the marital portion of the pension, but then also allowed her to use the husband’s share (even the non-martial portion) to be included as income for maintenance purposes.

The Court rationalized that its decision was based on the parties’ original Marital Settlement Agreement which followed the same rationale.  It is important to make this important distinction in your original agreement so that the same result does not occur in your case.

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