Divorced Mother Not Required To Split Child’s SSI Benefits With Ex-Husband

NOTE: There has been an update to this case as of February 2, 2024. For that information, see the bottom of this post.

A divorced mother was improperly ordered to direct half of her developmentally disabled child’s government benefits to her ex-husband, who is the child’s father, the Michigan Court of Appeals has ruled.

AM is a developmentally disabled child who receives Social Security Income (SSI) benefits. The parents of AM are divorced and AM lives at each parent’s home on a two-week basis. The parents are also AM’s coguardians. In an attempt to equally distribute AM’s SSI benefits between the parents, the Saginaw County Probate Court ordered the mother (Bomba) to pay half of AM’s monthly SSI benefits to her ex-husband (Bazakis). Bomba appealed the order.

The Court of Appeals reversed that part of the order requiring Bomba to direct half of the SSI benefits to Bazakis.

According to the Court of Appeals, the probate court’s order conflicted with the Social Security Act (SSA). “We hold that the order requiring that Bomba direct one-half of AM’s monthly SSI benefits to Bazakis conflicts with at least 42 USC 1383(a)(2)(A)(ii)(I), and potentially 42 USC 407(a).”

Judge Christopher M. Murray wrote the published opinion in In re Guardianship of Bazakis (Docket No. 358276). Judge Amy Ronayne Krause and Judge Colleen A. O’Brien joined the decision.

Federal Preemption

The main issue on appeal was whether the order requiring Bomba to pay half of the monthly SSI benefits to Bazakis was void because it was preempted by the SSA.

“Because there is no explicit statement by Congress expressing federal preemption on issues involving a representative payee’s handling of social security benefits, we must determine whether implied preemption exists,” the Court of Appeals wrote. “Bomba does not specify if her argument is based upon field or conflict preemption, and the case she leads with, Philpott v Essex Co Welfare Bd, 409 US 413 … (1973), does not speak to any form of federal preemption. Instead, the Philpott Court held that the mandates of 42 USC 407 applied to the state’s attempt to obtain social security benefits as reimbursement for housing costs, notwithstanding any state law. … Thus, it appears the court was applying conflict preemption, even though it did not expressly say so. We conclude that this matter is resolved through a straight-forward application of conflict preemption.”

According to the Court of Appeals, the most relevant provision of the SSA at issue was 42 USC 407(a). That statute says: “The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.”

Here, the probate court entered its order in an attempt to equally distribute the SSI benefits between the parties, the Court of Appeals observed. “Presumably, as Bazakis argues, the probate court entered the order in this guardianship proceeding under MCL 700.1302. Hence, the probate court had subject matter jurisdiction to enter the order, as a guardianship proceeding comes within the probate court’s limited jurisdiction.”

The question was whether this part of the probate court’s order conflicted with SSA mandates and, if so, which prevailed, the Court of Appeals explained. “The probate court order conflicts with the federal requirement that the representative payee determines (consistent with federal guidelines) how to best allocate the SSI benefits for the ‘use and benefit of’ AM,” the appeals court said, citing 42 USC 1383(a)(2)(A)(ii)(I). “This statute is clear in that only the representative payee can decide what to do with the SSI benefits awarded to the recipient, and other statutes are clear in what limits there are in allocating the benefits. The probate court’s order directing how Bomba - the representative payee - is to allocate AM’s benefits conflicts with these laws and, under the Supremacy Clause, the federal law controls over a conflicting state court order.”

In addition, the Court of Appeals pointed out that a majority of states addressing this same issue “have held that a state court order requiring a representative payee to make a specific payment on behalf of the recipient conflicts with, and thus is preempted by, these same provisions of the SSA. These decisions are persuasive.”

The Court of Appeals continued by addressing Bomba’s argument that the probate court could not order her to place SSI benefits into a joint account with both coguardians on the account, along with AM.

“Initially, we point out that our reading of the order is not necessarily the same as Bomba’s,” the Court of Appeals said. “… [T]here is no authority holding that an individual receiving benefits cannot hold a joint account. … Because the federal regulations expressly contemplate that an account may be held jointly with an SSI recipient, or that multiple SSI recipients might share a joint account, it stands to reason that an SSI recipient can in fact hold an account jointly with a nonrecipient. The probate court did not err when it ordered that all of the accounts in AM’s name would be held jointly between her coguardians.”

Accordingly, the probate court’s order “is reversed to the extent it directs Bomba how to allocate AM’s benefits, and in all other respects, we affirm,” the Court of Appeals concluded.

Update as of February 2, 2024 

The Michigan Supreme Court has vacated its order directing oral argument on the application, vacated the judgment of the Court of Appeals regarding the distribution of social security benefits, and vacated the probate court’s order concerning the distribution of social security benefits. The Supreme Court stated that “the decision whether to vacate turns on the conditions and circumstances of the particular case.” Further, it is the Court’s normal practice to vacate the lower court decisions when an issue becomes moot on appeal.  

The probate court, in November 2023, ordered the removal of Bomba as co-guardian and appointed Bazakis as the sole plenary guardian, and Bazakis has been appointed representative payee by the Social Security Administration. Because of this, the issues identified for oral argument were rendered moot. The mootness resulted from the “action[s] of the party who prevailed below” and not the “party seeking relief from the judgment below . . ..” The Court was not persuaded by the remaining questions presented, and thus denied leave to appeal.  

The result of vacating the lower court decisions means Bazakis, as the sole plenary guardian of AM and the representative payee, does not have to provide Bomba with a jointly held account with AM’s social security benefits, because Bomba is no longer a co-guardian. Further, Bazakis does not have to direct half of AM’s monthly SSI benefits to Bomba.