AGO 1956 No. 248 - Apr 19 1956
VETERANS; COURT ORDERS REQUIRING A VETERAN TO SUPPORT MINOR CHILDREN FROM VETERANS' ADMINISTRATION BENEFITS.
A court may order a veteran receiving benefits from the Veterans' Administration to support his minor children, even though the veteran's sole source of funds are such federal benefits. The benefits as well as property purchased with benefits are subject to such court order.
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April 19, 1956
Honorable Hugh H. Evans
Spokane 1, Washington Cite as: AGO 55-57 No. 248
Attention: Mr. Donald N. Olson, Deputy
You have requested the opinion of this office upon the following questions:
(1) Is disability compensation received by a veteran from the Veterans' Administration subject to a court order requiring the veteran to pay for the support of his minor children?
(2) Is property purchased by a veteran with such funds subject to such a court order?
Both of your questions are answered in the affirmative.
1. 38 U.S.C.A. § 454a, provides in part:
"Payments of benefits due or to become due shall not be assignable, and such payments made to, or on account of, a beneficiary under any of the laws relating to veterans shall be exempt from taxation, shall be exempt from the claims of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. Such provisions shall not attach to claims of the United States arising under such laws nor shall the exemption herein contained as to taxation extend to any property purchased in part or wholly out of such payments.
". . . Aug. 12, 1935, c. 510, § 3, 49 Stat. 609; Oct. 17, 1940, c. 893, § 5, 54 Stat. 1195."
In determining whether or not veterans' benefits are subject to a court order requiring the veteran to pay for the support of his minor children, it is essential to decide whether, within the intent of Congress in passing this exemption statute, dependent minor children of the veteran are to be considered "creditors."
In Pishue v. Pishue, 32 Wn. (2d) 750, 203 P. (2d) 1070, a wife has obtained a divorce decree which required her husband to pay for the support of their child. Thereafter, the husband, a veteran, was declared incompetent and became the beneficiary of a disability allowance payable by the Veterans' Administration. The wife as guardian of the minor child brought an action to have the original decree modified so as to increase the support for the child payable by the husband. The husband argued that his only Orig. Op. Page 3 source of funds was from his disability compensation received from the Veterans' Administration, that such funds were exempt from legal process, and that they could not be reached by court order. The trial court rejected this contention by increasing the support payment. Upon appeal, our supreme court affirmed the action below. After expressly recognizing the existence of 38 U.S.C.A. § 454a, the court said at 32 Wn. (2d) 756:
"Here, the trial judge, sitting as a court of equity, was called upon to determine the rights of the parties to a fund furnished entirely by the Veterans' Administration as a disability allowance to an incompetent veteran. The wife was not a 'creditor' of the estate, and the judge could have allowed her entire claim. However, realizing that this fund was furnished by the government for the maintenance, care, and support of the incompetent veteran, and appreciating also the duty of the veteran to support his minor child, the trial judge, in the exercise of his equity powers, raised the payments to the child, from the funds allocated for the father's benefit, from $13.80 a month to thirty-five dollars a month. This was an exceptionally fair and equitable distribution of the fund."
We regard the opinion in Pishue v. Pishue, supra, as authority for the conclusion that veterans' benefits are subject to a court order requiring the payment of support for the minor children of the veteran.
We also refer to the opinion of the California district court of appeals, second district, in the case of Gaskins v. Security-First National Bank of Los Angeles, 30 Cal. App. (2d) 409, 86 P. (2d) 681, where the court said at 86 P. (2d) 685:
". . . Further, the beneficent purpose manifested in the act of Congress is to preserve the disabled soldier's fund against imposition on the part of designing people or depletion by the soldier's own improvidence, and thereby to afford and insure continued support of persons suffering because of their military service. That Congress has the power to so preserve these funds provided by the government for the support of disabled incompetent soldiers and their dependents is well settled, but we cannot conceive that it was the purpose of the government to prevent the probate courts in guardianship proceedings from authorizing the application of these funds to the needs of the Veteran's children, even though the funds are derived from the government. The obligation of a father to support his minor children is not a debt contemplated by this act of Congress, but is an obligation growing out of the parental status and public policy, the performance of which can ordinarily be compelled by imprisonment as well as judgment and writ of execution; and we cannot assume that the Federal government ever intended to throw around these federal funds legal strictures that would permit or enable the beneficiaries thereof to refuse to discharge their duty to support their children. . . ."
2. We think it follows from the decision inPishue v. Pishue, supra, that, if a veteran's disability allowance is not exempt from a court order requiring him to pay for the support of his minor children,a fortiori property purchased with such benefits would not be exempt.
Moreover, it appears to be the general rule that, even in the case of an ordinary judgment creditor, property purchased with veterans' benefits is not exempt from legal process. In Kimbrough and Glen, American Law of Veterans, § 46, p. 30, (The Lawyers Cooperative Publishing Company, Rochester, New York, 1954), the following statement appears:
" Prior to the enactment of the 1935 federal exemption statute, there was considerable controversy and conflict of authority on the question of the exemption of property purchased with veterans' benefits which were themselves exempt from the claims of creditors. Under the present exemption statute, however, it is settled that property purchased with exempt benefits is not exempt. . . ."
See also, Carrier v. Bryant, 306 U.S. 545, 59 S.Ct. 707, 83 L.Ed. 976.
We hope the foregoing analysis will prove helpful to you.
Very truly yours,
J. CALVIN SIMPSON
Assistant Attorney General