James Lee Holman v. Sue Rodes Holman

Summary

The Kentucky Supreme Court held that disability retirement benefits must be classified as marital or nonmarital property according to the nature of the income or benefits they replace. Because the firefighter's future disability benefits replaced post-dissolution firefighter wages, they were his separate nonmarital property. The court reversed the Court of Appeals and remanded for redistribution of the marital estate.

Holdings

1. Disability retirement benefits must be classified as marital or nonmarital according to the character of the property they replace. Future, post-dissolution benefits replacing future nonmarital earnings are the recipient spouse's separate nonmarital property.
2. The classification of disability retirement benefits as marital or nonmarital property presents a question of law subject to independent appellate determination.
3. The recipient's ability to earn a living in another occupation is irrelevant to classification of disability benefits that replace post-dissolution wages from the occupation in which the disability occurred.

Questions Presented

1. Whether future disability retirement benefits payable to a firefighter after dissolution of marriage are marital or nonmarital property under Kentucky law.
2. Whether classification of disability retirement benefits is reviewed as a question of law or for clear error.
3. Whether the appellant's ability to earn income from another occupation affects classification of disability benefits that replace his post-dissolution firefighter earnings.

Disposition

reversed_and_remanded