The Herald, Sharon, Pa.

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May 3, 2012

Ex-wife entitled to share of vets’ benefits, court rules

MERCER COUNTY — In a precedential opinion, Superior Court said Tuesday that the ex-wife of a Mercer County veteran can collect a percentage of the increase in his invested veterans’ disability payments.

The decision, which the court had considered since Dec. 6 arguments, upholds the earlier ruling by Mercer County Common Pleas Court Judge Christopher J. St. John.

A Pennsylvania court had never before considered the “issue of whether the increase in value of invested veterans’ disability payments that accrued during a marriage is marital property subject to equitable division,” said Superior Court Judge John L. Musmanno, writing for a three-judge panel.

John R. Goodemote and Vickie L. Goodemote were married July 13, 1991, and divorced March 28, 2011, Musmanno said.

Goodemote is a Vietnam veteran injured during the war, which entitled him to receive veterans’ disability benefit payments since his 1969 discharge.

Through 1978, Goodemote deposited the payments into an investment account. Since then, he has used the payments for living expenses.

During his marriage to Vickie, the value of Goodemote’s investment account rose from $74,375 to $158,932, an increase of $84,558. St. John ruled that Goodemote had converted the disability payments into permanent investments by putting them into the investment account.

The determination is important because both sides agreed that a 1962 U.S. Supreme Court case known as Porter – concerning the exemption of veterans’ disability benefits – is controlling.

The Porter case set three criteria for determining exempt status, whether the payments: are readily available for support and maintenance; “actually retain the qualities of moneys”; and have not been converted into permanent investments, Musmanno said.

“Goodemote failed to meet the third prong ... as he had converted the VA payments he deposited in the investment account into permanent investments,” Musmanno said.

“The investment account was not merely a savings account; rather, it was comprised of several investment portfolios that were subject to gains and losses, including securities, mutual funds and annuities,” he said. “Further, the value of the investment account increased greatly over the years from reinvestment of the account’s earnings.”

Vickie Goodemote is entitled to half of the $84,558 increase in the value of the investment account that accrued during the marriage, Musmanno said.

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