[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as
Daniel v. Daniel, Slip Opinion No. 2014-Ohio-1161.]




                                        NOTICE
     This slip opinion is subject to formal revision before it is published in
     an advance sheet of the Ohio Official Reports. Readers are requested
     to promptly notify the Reporter of Decisions, Supreme Court of Ohio,
     65 South Front Street, Columbus, Ohio 43215, of any typographical or
     other formal errors in the opinion, in order that corrections may be
     made before the opinion is published.


                         SLIP OPINION NO. 2014-OHIO-1161
                    DANIEL, APPELLANT, v. DANIEL, APPELLEE.
   [Until this opinion appears in the Ohio Official Reports advance sheets,
    it may be cited as Daniel v. Daniel, Slip Opinion No. 2014-Ohio-1161.]
Domestic     relations—Divorce—Marital          property—R.C.       3105.171(A)(3)(a)—
        Military retirement benefits—Unvested military retirement benefits earned
        during marriage are marital property subject to division—Present value
        need not be determined—Court may fashion order deferring distribution
        until benefits become payable.
   (No. 2012-2113—Submitted October 22, 2013—Decided March 26, 2014.)
       APPEAL from the Court of Appeals for Mercer County, No. 10-11-09,
                                   2012-Ohio-5129.
                               ____________________
                              SYLLABUS OF THE COURT
Unvested military retirement benefits earned during marriage fall within the
        definition of marital property in R.C. 3105.171(A)(3)(a) and must be
        considered for division under R.C. 3105.171(C).
                               ____________________
                             SUPREME COURT OF OHIO




       O’NEILL, J.
       {¶ 1} In this case, we consider whether unvested military retirement
benefits are assets to be considered in a divorce property division. While there is
always a degree of uncertainty regarding the precise value of such benefits, it is
beyond dispute that they do have value, even if that value will become fixed only
in the future. Accordingly, a trial court must take such benefits into account when
determining a division of property.
                   FACTS AND PROCEDURAL HISTORY
       {¶ 2} Plaintiff Christen Daniel and defendant Sean Daniel were married
in 1995. The marriage produced three children, who were aged 13, 11, and 7 at
the time of the divorce hearing. During the marriage, the parties separated on two
occasions: from fall 2004 until December 2005 and from January 2008 through
the date of the divorce decree in 2011.
       {¶ 3} The defendant enlisted in the National Guard just prior to the
marriage, and at the time of the divorce hearing had been in the Guard for 16
years. Prior to the hearing, he reenlisted for an additional six years, and he will be
eligible to receive retirement benefits once he accumulates 20 years of credit. The
parties entered into an agreement regarding custody of the three children, so their
divorce trial related only to division of property and debt.
       {¶ 4} The matter was heard by a magistrate, who concluded that “Ohio
law does not permit the court to divide a non-vested pension benefit.” The
plaintiff-wife objected to this finding, arguing that “since the Defendant is already
contractually committed to remain in the military through vesting ‘age’, the court
should have divided one-half of his retirement benefits during the years of
marriage.”    The plaintiff contended that the court erred in concluding that
unvested military benefits cannot be divided and that the court should have
divided those benefits by computing the ratio of the number of years of the
defendant’s military service during the marriage to the total years of his military




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                                January Term, 2014




service.   The trial court overruled the plaintiff’s objection and adopted the
magistrate’s decision. In its final order, the trial court found that the defendant’s
military retirement benefits were a “mere expectancy” and concluded that there
were “no retirement benefits for the court to divide.”
       {¶ 5} The court of appeals affirmed this decision, even though it implied
that the trial court’s analysis may have been incorrect. The majority concluded
that there was no need to decide whether unvested pension benefits are a marital
asset, because insufficient evidence regarding Sean’s retirement benefits was
presented at trial in this case to require division of the asset. But a separate
opinion dissenting on this point observed that in this case, “the potential military
pension is the only marital asset that the parties may have,” and for that reason,
“an exact valuation or further details concerning the plan was not necessary in
order for the court to provide for the future division of this asset.” (Emphasis sic.)
2012-Ohio-5129, ¶ 61 (Willamowski, J., concurring in part and dissenting in
part). “[T]he trial court had before it all of the information that was needed in
order to award Christen one half of the amount of any future military pension that
was attributable to the points that were earned during the marriage.” Id. at ¶ 64.
The plaintiff appealed, and this court accepted jurisdiction to determine whether
unvested military retirement benefits are marital assets subject to division in
divorce proceedings.
       {¶ 6} We agree with the dissent. While the exact amount to be divided is
not ascertainable unless and until the service member completes the required 20
years of service, the percentage of ownership of the benefits on the date of
divorce can readily be discerned. It is simple math: the number of years in service
compared to the number of years of marriage provides the formula for division.
                                    ANALYSIS
       {¶ 7} In any divorce action, the starting point for a trial court’s analysis
is an equal division of marital property. R.C. 3105.171(C)(1); Neville v. Neville,




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                             SUPREME COURT OF OHIO




99 Ohio St.3d 275, 2003-Ohio-3624, 791 N.E.2d 434, ¶ 5. Although the trial
court was not specific on this point, it concluded, in essence, that because the
defendant’s military retirement benefits had not vested, they were not marital
property and were therefore not subject to division. We disagree.
       {¶ 8} As defined in R.C. 3105.171(3)(a), “marital property” includes
“[a]ll real and personal property that currently is owned by either or both of the
spouses” and “[a]ll interest that either or both of the spouses currently has in any
real or personal property, including, but not limited to, the retirement benefits of
the spouses, and that was acquired by either or both of the spouses during the
marriage.” (Emphasis added.) R.C. 3105.171(A)(3)(a)(i) and (ii).
       {¶ 9} The statute does not distinguish between vested or unvested
retirement benefits. The portion of the statute that sets forth what is not to be
considered marital property does not mention retirement benefits at all. R.C.
3105.171(A)(3)(b).      We have held that vested pension benefits are marital
property. Hoyt v. Hoyt, 53 Ohio St.3d 177, 178-179, 559 N.E.2d 1292 (1990).
But we have never addressed unvested benefits in this context.
       {¶ 10} Admittedly, it may be difficult to ascertain the value of benefits
that have not yet vested and may never vest. But it does not follow that those
future benefits have no value. Most states hold that unvested retirement benefits
accrued during the marriage constitute marital property subject to division. See
Cohen v. Cohen, 937 S.W.2d 823, 829 (Tenn.1996) (listing cases from 37 states).
       {¶ 11} In addressing the division of pension benefits, courts have
fashioned two approaches: the “present cash value” method, which requires the
court to place a value on the benefit as of the date of the final decree and divide
that value between the parties, and the “deferred distribution” method, in which
the court devises a formula for dividing the monthly benefit at the time of the
decree, but defers distribution until the benefits become payable. Cohen at 831;
see also Hoyt at 181.




                                         4
                                   January Term, 2014




        {¶ 12} Our holding in Wilson v. Wilson, 116 Ohio St.3d 268, 2007-Ohio-
6056, 878 N.E.2d 16, provides a useful example of the “deferred distribution”
method of accomplishing an equitable division of an unvested retirement benefit.
The trial court in that case included in the divorce decree the following language:
“The defendant shall receive one-half of the coverture value of the plaintiff’s
unvested Teamsters pension if and when it becomes vested. This division shall be
through a qualified domestic relations order (QDRO) prepared and signed at the
time of the vesting.”1 Wilson at ¶ 3.
        {¶ 13} Similarly, in Hoyt this court approved the division of a vested but
unmatured pension benefit by the use of a Qualified Domestic Relations Order,
but rejected the claim that the trial court must always use the present vested value
of a plan in reaching its division of property. Id. at 183-184. We identified the
two goals that trial courts must balance when dividing pension assets. “[W]hen
circumstances permit, [trial courts] should strive to resolve the issues between the
parties so as to disassociate the parties from one another or at least minimize their
economic partnership.” Id. at 182. But “the trial court must obtain a result which
will preserve the asset so that each party can procure the most benefit.” Id. at
181. And we recognized that in some situations, achieving the latter goal may
mean that the former must yield:


                 When a trial court decides that a pension or retirement asset
        shall be paid by deferred distribution, it has created a situation
        where the parties’ affairs are not concluded. * * * Although this
        alternative divides the risk between the parties that the benefits will
        fail to vest or mature, as an example, there is nothing to prevent an

1
  We recognize that a Qualified Domestic Relations Order is a device specifically designed for
assigning benefits to a nonparticipant spouse under the federal Employment Retirement Income
Security Act, 29 U.S.C. 1001 et seq., and that such an order is not applicable to a nonprivate
pension. But it may provide a useful model.




                                              5
                              SUPREME COURT OF OHIO




        employed spouse, for whatever reason, from quitting his or her
        employment and becoming employed elsewhere. Likewise, the
        nonemployed spouse bears the risk that the employed spouse will
        die and the expected benefits, before being vested or matured, will
        terminate.


Id. at 182. Hoyt recognizes that while it is desirable to bring finality to the
parties’ marriage by dividing assets once and for all, doing so is not possible in all
cases, because it sometimes leads to an inequitable result. And while the dollar
amount in all likelihood will change as retirement approaches, the percentage
interest of the parties in the pension will not.
        {¶ 14} The appellate court seems to have understood that the defendant’s
unvested retirement benefit was marital property under the statute, but then
concluded that since the precise value of the benefit could not be ascertained
based on the record presented, it could not be divided. But fixing a precise
present value and the date of vesting is not mandatory. See Hoyt, 53 Ohio St.3d at
182, 559 N.E.2d 1292; Wilson, 116 Ohio St.3d 268, 2007-Ohio-6056, 878 N.E.2d
16, at ¶ 19-20; Neville, 99 Ohio St.3d 275, 2003-Ohio-3624, 791 N.E.2d 434, at
¶ 10-11. And in the case of such an important asset, a court can and should seek
other reasonable methods of achieving equity. As we noted in Hoyt, “[w]hen the
only marital asset of the parties is an employed spouse’s pension or retirement
benefits, it is difficult for the trial court to structure an equitable property division
without dividing the pension or retirement asset.” Hoyt at 183.
        {¶ 15} As the plaintiff notes, one possible way to divide such assets is by
computing “the ratio of the number of years of [the] employed spouse’s
employment during the marriage to the total number of years of his or her
employment,” id., a ratio that has come to be known as the “coverture fraction.”
See, e.g., Thompson v. Thompson, 196 Ohio App.3d 764, 2011-Ohio-6286, 965




                                           6
                                January Term, 2014




N.E.2d 377, ¶ 33. In this case, the trial court was provided all of the information
needed to calculate the coverture fraction: the dates of the marriage, the dates of
defendant’s military service, and the dates the two overlapped. This is all that
was necessary to award the plaintiff a percentage share of the defendant’s military
retirement benefit. The fact that its precise value will not become fixed, if it ever
does, until some future date is irrelevant. The trial court had enough information
in this case to make an equitable division of the benefits, whether by the
plaintiff’s suggested coverture fraction or some other appropriate method.
       {¶ 16} The trial court and the court of appeals were mistaken in
concluding that the defendant’s unvested military pension was not a divisible
asset. This record, although sparse, is sufficient to demonstrate that the plaintiff
was entitled to share in the sole remaining asset that was earned during the
marriage. The trial court erred as a matter of law, and as a result its division of
property was inequitable and an abuse of discretion.
                                 CONCLUSION
       {¶ 17} Unvested military retirement benefits earned during the marriage
fall within the definition of marital property in R.C. 3105.171(A)(3)(a) and must
be considered for division under R.C. 3105.171(C). We reverse the judgment of
the court of appeals and remand this case to the trial court for further proceedings.
                                                                 Judgment reversed
                                                               and cause remanded.
       PFEIFER, KENNEDY, and FRENCH, JJ., concur.
       O’CONNOR, C.J., and O’DONNELL and LANZINGER, JJ., dissent.
                             ____________________
       O’DONNELL, J., dissenting.
       {¶ 18} I respectfully dissent.
       {¶ 19} This case presents a question of statutory interpretation regarding
whether an unvested, contingent future interest in military retirement benefits is




                                          7
                            SUPREME COURT OF OHIO




marital property subject to equitable division in a divorce proceeding.         This
question is substantially different from the division of assets held in a pension or
IRA account—which are customarily divided using a QDRO—because in this
instance, the benefits are not currently owned by either party to the divorce, can
only be acquired, if ever, after termination of the marriage, and may never vest.
The General Assembly has specifically defined marital property to include only
assets currently owned by a party to a proceeding and therefore has not provided
that unvested interests or future interests in property are marital assets.
Accordingly, because these military retirement benefits are not marital property,
the appellate court correctly resolved this issue, and its judgment should be
affirmed.
       {¶ 20} The role of the judiciary in the exercise of the judicial power
granted by the Constitution is to interpret the law that the General Assembly
enacts, and the primary goal in construing a statute is to ascertain and give effect
to the intent of the legislature. State v. Robinson, 124 Ohio St.3d 76, 2009-Ohio-
5937, 919 N.E.2d 190, ¶ 18. Here, the General Assembly has clearly expressed
its intent by enacting R.C. 3105.171(A)(3)(a), which specifically defines “marital
property” to include:


               (i) All real and personal property that currently is owned by
       either or both of the spouses, including, but not limited to, the
       retirement benefits of the spouses, and that was acquired by either
       or both of the spouses during the marriage;
               (ii) All interest that either or both of the spouses currently
       has in any real or personal property, including, but not limited to,
       the retirement benefits of the spouses, and that was acquired by
       either or both of the spouses during the marriage.




                                         8
                                 January Term, 2014




(Emphasis added.) Notably, marital property includes retirement benefits of the
spouse acquired during the marriage and all interests that either spouse currently
has in the retirement benefits at the time of the equitable division of property.
The General Assembly could have also included unvested interests in retirement
benefits or future interest in property that a spouse may receive or acquire at a
future time, but it chose not to include such an inchoate interest in the definition
of marital property. Thus, future interests in property that might possibly vest, if
at all, after the termination of a marriage have not been acquired during the
marriage, are not currently owned by either or both spouses, and a spouse
currently has no interest in such benefits. Therefore, they are not marital property
subject to equitable division by a trial court.
        {¶ 21} In this case, at the time of the divorce, Sean Daniel did not
currently own any right to military retirement benefits from the National Guard,
because he had not accumulated 20 years of service credit. Nor did he currently
have an interest in those benefits, because that interest had not vested and could
only vest into an enforceable right to payment in the future—only after
termination of the marriage. Notably, he had no ownership right or possessory
interest in those benefits that would permit him to bring a cause of action for a pro
rata share of those benefits based on his years of service in the National Guard at
the time of the divorce. And because he had not acquired any right to receive
retirement benefits from the National Guard during the marriage, the trial court
had nothing to divide.
        {¶ 22} Thus, contrary to the view of the majority, which ignores the
General Assembly’s use of the word “currently” in defining marital property, I
would decide this case in accord with the expressed intent of the legislature as set
forth in the plain language of the statute. The General Assembly has defined the
term “marital property” to include property that is currently owned by either
spouse, including retirement benefits, and all interest that either spouse currently




                                           9
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has in retirement benefits. Since neither spouse here currently has a vested
interest in these benefits, they are not marital property, and the domestics relations
court may not divide them nor consider them in its distribution of marital assets.
       {¶ 23} If the General Assembly believes that a change in its policy is
warranted, it may choose to include unvested interests in retirement benefits as
marital property at some future time. But at present, it has not done so, and this
court has taken upon itself the role of legislating from the bench in its conclusion
that it will order these benefits to be considered as marital property. I cannot join
in this action, because I believe in judicial restraint and the role of the court as
being limited to interpreting the law as written by the General Assembly.
       {¶ 24} The court of appeals correctly adjudicated this issue, and I would
affirm its judgment.
                             ____________________
       LANZINGER, J., dissenting.
       {¶ 25} I respectfully dissent and would hold that this case was
improvidently accepted. The majority has redefined marital property under R.C.
3105.171(A)(3)(a) simply to reverse the outcome in a single case. This case raises
an issue that deserves a full adversarial presentation to avoid a judgment whose
far-reaching consequences are unintended. Unvested pensions are not marital
property, for until the pension is vested, neither spouse has a current interest as
required by R.C. 3105.171(A)(3)(a)(i), and vesting is a contingent event. What
other mere contingencies and expectations will trial courts be required to consider
marital assets subject to division in R.C. 3105.171(C)?
       {¶ 26} We have established that a trial court has broad discretion to divide
property in domestic relations cases, and its decision will not be disturbed on
appeal absent unreasonable, arbitrary, or unconscionable conduct. Middendorf v.
Middendorf, 82 Ohio St.3d 397, 401, 696 N.E.2d 575 (1998), citing Holcomb v.
Holcomb, 44 Ohio St.3d 128, 541 N.E.2d 597 (1989); Martin v. Martin, 18 Ohio




                                         10
                               January Term, 2014




St.3d 292, 294-295, 480 N.E.2d 1112 (1985); Blakemore v. Blakemore, 5 Ohio
St.3d 217, 219, 450 N.E.2d 1140 (1983); Berish v. Berish, 69 Ohio St.2d 318,
319, 432 N.E.2d 183 (1982). “If there is some competent, credible evidence to
support the trial court’s decision, there is no abuse of discretion.” Middendorf at
401.
         {¶ 27} The court of appeals concluded in a two-to-one decision that it
could not find an abuse of discretion in the trial court’s decision not to award a
portion of the unvested military pension based upon the scant record in this case.
But with only one party, the appellant, filing a single brief in this court and
presenting oral argument without opposition, the majority now determines that
unvested military benefits must be considered as marital property subject to
division. Even the dissenting judge in the court of appeals acknowledged that we
have not yet ruled on this specific issue, although commenting that current law
“allows” consideration of an unvested military pension in the division of assets.
2012-Ohio-5129 at ¶ 58 (Willamowski, J., concurring in part and dissenting in
part).
         {¶ 28} The previous holdings of this court dealing with the division of
pension benefits have rightly noted the importance of vesting. Teeter v. Teeter, 18
Ohio St.3d 76, 78, 479 N.E.2d 890 (1985) (military pension benefits that were
earned during the marriage and that had vested and were being paid at the time of
the divorce are marital assets and a factor to be considered in the division of
property); Hoyt v. Hoyt, 53 Ohio St.3d 177, 182, 559 N.E.2d 1292 (1990)
(distinguishing between potential division methods for vested matured and vested
unmatured pension benefits).
         {¶ 29} We have stated that “[p]ension or retirement benefits accumulated
during the course of a marriage are marital assets subject to property division in a
divorce action.” (Emphasis added.) Erb v. Erb, 75 Ohio St.3d 18, 20, 661 N.E.2d
175 (1996).     But retirement benefits that have not vested have not actually




                                        11
                             SUPREME COURT OF OHIO




accumulated. They do not exist as actual benefits until they vest. The statute
defining marital assets emphasizes this point:


               “Marital property” means * * *
               (i) All real and personal property that currently is owned by
       either or both of the spouses, including, but not limited to, the
       retirement benefits of the spouses, and that was acquired by either
       or both of the spouses during the marriage;
               (ii) All interest that either or both of the spouses currently
       has in any real or personal property, including, but not limited to,
       the retirement benefits of the spouses, and that was acquired by
       either or both of the spouses during the marriage;
               ***
               (b) “Marital property” does not include any separate
       property.


(Emphasis added.) R.C. 3105.171(A)(3)(a).
       {¶ 30} The statute does not have the expansive meaning the majority
gives it. It may well be that that this court should adopt a rule that unvested
military retirement benefits accrued during the marriage constitute marital
property subject to division even while those benefits remain unvested. However,
such a change in precedent should not occur without robust adversarial
presentation. This issue is too important in its ramifications to be decided with
half of the argument unpresented and unheard.
       {¶ 31} This is an example of a one-sided case potentially making bad law.
Because I believe that we should not have accepted this case for review under
these circumstances, I dissent.
       O’CONNOR, C.J., concurs in the foregoing opinion.




                                         12
                       January Term, 2014




                    ____________________
James A. Tesno, for appellant.
                 _________________________




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