In Re Marriage of Shea

Opinion

BROWN (Gerald), P. J.

Thomas M. Shea appeals an interlocutory judgment dissolving his marriage to Sandra E. Shea. The appeal concerns only the trial court’s finding Thomas’ veteran’s education benefits received during marriage were community property, and the trial court’s method of computing the community interest in the parties’ residence.

Thomas served in the United States Navy from January 1969 to January 1973. In May 1973 he began receiving veteran’s education benefits (38 U.S.C. § 1651 et seq.) which continued, with a few interruptions during the summer months when he was not in school, until December 1978. In June 1974, he bought a house, taking title in his own name. He made a down payment of $3,000, paid almost $1,500 in “points” and closing costs, and obtained a loan for the balance of the purchase price. He then began making monthly payments on the loan. Each installment included interest, taxes and insurance, as well as reduction of the loan principal. Sandra and Thomas were married November 27, 1974, and separated May 17, 1979.

At trial Thomas contended the veteran’s benefits were his separate property and he sought to introduce evidence showing he had used these funds for most of the house payments made during the marriage. The trial court found the benefits received during marriage were community

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property and calculated the community interest in the house accordingly. The court did not permit Thomas to offer evidence showing the source of the money used for house payments during the marriage. In computing the community interest in the house, the court used the full amount of the monthly payments made during the marriage, instead of the amount by which these payments reduced the principal.

I. The Veteran’s. Education Benefits

Where one spouse has served in the armed forces before marriage, are veteran’s education benefits received during marriage community property?

1

Congress has enacted a comprehensive program of veterans’ education benefits to make service in the armed forces more attractive to prospective recruits and to make educational opportunities available to veterans who otherwise would not be able to afford them, or whose educations have been interrupted by military service (38 U.S.C. § 1651). To receive the benefits, a veteran must meet eligibility requirements, including a minimum of 180 days of service (§ 1652); a veteran must have served at least 18 months on active duty to be eligible to receive benefits for the maximum period of 45 months (§ 1661(a)). A veteran must apply for the benefits, but the Veterans Administration “shall” approve the application unless the veteran or his planned course of study is ineligible (§ 1671). Benefits are payable only while the veteran is enrolled and making satisfactory progress in an approved educational program (§§ 1674, 1683, 1772). The benefits are “an educational subsistence allowance to meet, in part, the expenses of the veteran’s subsistence, tuition, fees, supplies, books, equipment, and other educational costs” (§ 1681), but the statute does not expressly limit the purposes for which the veteran may use the funds. A veteran with dependents receives an increased allowance, based on the number of dependents (§ 1682).