Applying the Post-9/11 GI Bill

October 28, 2013 § Leave a comment

As war drags on in the Far East, there is a growing number of veterans who have earned entitlement to educational benefits under the Post-9/11 Veterans Educational Assistance Act of 2008, known as the “Post-9/11 GI Bill,” codified at 38 USC § 3301, et seq.

The law grants active-duty veterans payment of college tuition, fees, books, and a monthly housing allowance. Those benefits may be transferred to a family member. The law includes the language, however, that:

” … Entitlements transferred … may not be treated as marital property, or the asset of a marital estate, subject to division in a divorce or other civil proceeding.” 38 USC § 3319(f)(3).

George Neville and his former wife, Tina Blitz, were confronted with how to divide Post-9/11 benefits in connection with the college education of their daughter, Joyce. George was eligible for Post-9/11benefits, and he decided to transfer them to Joyce.

George wanted Joyce to attend SMU so as to maximize her Post-9/11 benefits. Tina wanted Joyce to attend a state-supported school in Mississippi so as to qualify for in-state tuition. Joyce chose SMU, and she and George agreed that she would bank the $1,200 monthly housing stipend to use after her entitlement to Post-9/11 benefits expired, presumably when she reached age 21. For her share, Joyce began paying the equivalent of the expenses at a state-supported school.

George filed a petition to modify the parties’ divorce judgment. His position at trial was that he wanted Tina to pay all expenses not covered by the GI Bill, which he estimated to be around $19,000 a semester.  

The chancellor modified the judgment to provide that George was entitled to full credit for tuition, fees, and books, but that the $1,200 housing benefit would be taken off the top, and not credited to him. George appealed, complaining that the chancellor’s ruling was a division of benefits contrary to the statute.

In a case of first impression, the MSSC in Neville v. Blitz, rendered September 26, 2013, reversed the trial court’s ruling. The opinion by Justice Coleman, explained:

¶9. We previously have considered distribution of military disability benefits and military retirement pay in domestic relations cases. See Mallard v. Burkart, 95 So. 3d 1264, 1272 (¶ 21) (Miss. 2012); Rennie v. Rennie, 718 So. 2d 1091, 1095 (¶ 13) (Miss. 1998); Hemsley v. Hemsley, 639 So. 2d 909, 913 (Miss. 1994); Newman v. Newman, 558 So. 2d 821, 823 (Miss. 1990). But those cases dealt with the application of other federal laws pertaining to military benefits, such as the Uniformed Services Former Spouses’ Protection Act, not the Post-9/11 GI Bill. The instant issue is one of first impression for the Court, and we have not found any cases from any jurisdiction directly addressing the specific issue at hand.

¶10. In the instant case, the chancellor held that Joyce’s college expenses should be reduced by her scholarships and the $1,200 monthly housing stipend; then Tina and George were to split the remaining amount equally, with George taking full credit for all Post-9/11 GI Bill benefits except the housing stipend. George asserts that the chancellor’s treatment of the monthly housing stipend violated Section 3319, which provides that benefits transferred to a spouse or child “may not be treated as marital property, or the asset of a marital estate, subject to division in a divorce or other civil proceeding.” 38 U.S.C. § 3319(f)(3) (2011). Tina maintains that the prohibition on treating transferred benefits as marital property is inapplicable, because the chancellor did not classify the stipend as marital property; thus, she maintains that the chancellor’s decision did not constitute a division of the benefits. Tina also argues that, because George transferred the benefits to Joyce, the benefits belong to Joyce much like her scholarships; therefore, Tina asserts that taking the benefits off the top before dividing the remainder between the parents was appropriate.

¶11. George earned the benefits at issue here long after the parties divorced, and neither party claims that the benefits are marital property. We agree that George’s Post-9/11 GI Bill benefits were not marital property because they were not earned during the marriage; thus, they were not subject to division. See Wheat v. Wheat, 37 So. 3d 632, 637 (¶¶ 14-15) (Miss. 2010); Hemsley, 639 So. 2d at 915 (Miss. 1994). While the chancellor did not label the benefits as marital property, his instruction to take the benefits off the top of Joyce’s expenses gave  Tina a credit that she otherwise would not have had and resulted in George not getting full credit for all of the Post-9/11 GI Bill benefits. We find that the chancellor’s decision effectively acted as a “division” of the benefits. Although the proceeding was not an original divorce proceeding, it was a “civil proceeding” pertaining to modification of a divorce decree. Therefore, we conclude that the chancellor’s allocation of the housing stipend amounted to a division of the benefits in a civil proceeding, which is prohibited by Section 3319(f)(3).

¶12. Tina’s argument that the GI Bill benefits belonged to Joyce lacks merit. When benefits are transferred, the service member has the option to revoke the transfer at anytime. 38 U.S.C. § 3319(f)(2) (2011). Thus, the service member remains in control of the transferred benefits, and they still belong to him. The chancellor held that George was entitled to credit for the rest of the benefits – the payments for tuition, fees, and books – but the $1,200 monthly stipend was taken off the top of the expenses and not credited to George. All of the benefits should be treated equally. Because the GI Bill benefits still belong to George, he should be credited with all of them, and none of the benefits should be divided between George and Tina.

The case was remanded to the chancery court.

The chancellor in this case did exactly what I think most chancellors would have done; that is, to credit George with the actual benefit of his entitlement that was being applied for the child during her minority, and splitting the remaining unpaid expenses between the two parents.

The wild card in this case, however, was the GI Bill, which includes express language against dividing the benefits. In this scenario, the MSSC found that the chancellor had, indeed, divided the benefits by force of his ruling, against the language of the statute.

This would seem to be a more frequently encountered fact situation as greater numbers of active-duty veterans pass through our courts in domestic relations actions. The Post-9/11 GI Bill is a law with which you need to become familiar.

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