Survivor Benefit Plan = Insurance, not retirement

Daniel and Rachel Bushnell divorced in 2009. They signed a Settlement Agreement awarding half Dan’s Army National Guard retirement earned during the marriage.

In 2012, Rachel filed a motion claiming Dan had breached the Agreement because he refused to name her as the Survivor in his Survivor Benefit Plan which included a Survivor Annuity. The issue was whether the Annuity was part of the retirement benefits Rachel was awarded under the agreement. The District Court said “yes”. The Montana Supreme Court said “no.”

The Supreme Court held:

• District Courts generally have the power to award survivor annuities.
• This Settlement Agreement, however, did not do so.
• An annuity is in the nature of an insurance policy.
• The Settlement Agreement did not specifically reference the survivor benefits or the annuity.
• The Settlement Agreement awarded retirement benefits “earned during the marriage” and this annuity was not earned during the marriage (it would spring into existence on Dan’s death).
• The Settlement Agreement said insurance policies were the property of the party whose life was insured.
•  Because the Settlement Agreement, a contract under 40-4-201(5) M.C.A. did not provide for Rachel to get the annuity, it could only be awarded to her based upon a finding of unconscionability. 40-4-201 (3) M.C.A. which the District Court failed to do.

Reversed.

Marriage of Bushnell 2014 MT 130