Boulter v. Boulter
113 Nev. 74, 930 P.2d 112 (1997)

  • Ronald was married to Noleen for 37 years. They filed for divorce and executed a property settlement agreement (aka a separation agreement). The separation agreement was merged into the divorce decree.
    • Merged means that it was an official part of the divorce decree, not a separate contract.
    • The separation agreement stipulated that both Ronald and Noleen would each split their social security checks 50-50.
  • When Ronald turned 65, he spitefully declined to apply for his social security benefits. That meant he was missing out on money for himself, but it also meant that he’d owe Noleen 50% of nothing.
    • Noleen argued that Ronald should pay her an equivalent amount out of his own funds.
    • Ronald argued that the separation agreement didn’t stipulate that they had to apply for benefits, only that they had to give the other party 50% of what they received.
    • Ronald also argued that the separation agreement should be void because there is a Federal law (42 U.S.C. ¤407(a)) prohibiting division of social security benefits.
  • The Trial Court found for Noleen and issued an order to compel Ronald to apply for social security benefits. Ronald appealed.
    • The Trial Court found that since Roland’s lawyer prepared the agreement, any ambiguities should be resolved against Ronald.
      • The Court found it was ambiguous whether or not the separation agreement required the parties to accept their social security benefits.
  • The Nevada Supreme Court reversed.
    • The Nevada Supreme Court found that the separation agreement had been merged into the divorce decree. That constitutes State action that has been preempted by Federal law.
      • See Philpott v. Essex County Welfare Bd. (409 U.S. 413 (1973)), which imposes “a broad bar against the use of any legal process to reach all social security benefits.”
    • The Court found that social security recipients may use the proceeds of their social security, after receipt, to satisfy preexisting obligations, but they may not contract to transfer their unpaid benefits.