Federal Preemption Does Not Void Voluntary Division of Veterans’ Disability Benefits in Marital Settlements

Introduction

In In re Marriage of Tronsrue, 2025 IL 130596, the Illinois Supreme Court addressed whether a state court may enforce a marital settlement agreement provision obliging a veteran‐spouse to pay a former spouse a share of his federal military disability benefits. Elsa M. Tronsrue (wife) and George M. Tronsrue III (husband) divorced in 1992. Their marital settlement agreement provided that George would pay Elsa 18.6% of his Army Disability Retirement pay and 18.6% of his VA disability pension. In 2019, George petitioned to terminate those payments, arguing they were void under federal law. Elsa moved to dismiss, and the circuit court found George in contempt for failing to comply. The appellate court affirmed, and George sought review in the Illinois Supreme Court on two issues:

Whether federal law preempts state enforcement of a voluntary agreement to divide veterans’ disability benefits;
Whether an award of attorney fees based on enforcement of that agreement must be vacated if the agreement were void.

Summary of the Judgment

The Supreme Court of Illinois, in a unanimous opinion by Justice Neville, affirmed the appellate and circuit court judgments. The court held:

Federal law does not preempt enforcement of a marital settlement agreement in which a veteran voluntarily agrees to pay a former spouse a share of his disability benefits after receipt.
The Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/502) authorizes courts to incorporate and enforce marital settlement agreements, including by contempt.
The circuit court had both personal and subject‐matter jurisdiction in 1992 and retained jurisdiction to enforce its divorce decree; the agreement was therefore valid and not void.
Attorney fees awarded under 750 ILCS 5/508(b) for willful noncompliance with the judgment were properly imposed and not predicated on a void order.

Analysis

Precedents Cited

The court examined key United States Supreme Court decisions on federal preemption of military and disability pay in divorce proceedings:

Mansell v. Mansell, 490 U.S. 581 (1989) – Held that state community property laws may not treat waived military retirement pay (converted to disability benefits) as divisible property. The Court did not address voluntary post‐receipt agreements.
Howell v. Howell, 581 U.S. 214 (2017) – Prohibited state courts from ordering a veteran to indemnify a former spouse for lost retirement pay when the veteran converts to disability benefits, but did not bar voluntary assignments of received benefits.

The Tronsrue court distinguished both cases on the ground that neither invalidates a freely negotiated indemnity or settlement agreement by which a veteran disposes of benefits he already received.

Legal Reasoning

The court’s reasoning proceeded in three principal steps:

Enforceability of the Agreement: A marital settlement agreement is a contract under Illinois law (750 ILCS 5/502). George voluntarily agreed to use his veterans’ benefits to pay Elsa. Federal law (38 U.S.C. § 5301) bars assignments of benefits before receipt, but does not prevent a veteran from spending or promising the funds once in hand. The court found no direct conflict or express preemption.
Jurisdiction and Res Judicata: When the 1992 divorce decree was entered, the circuit court had personal and subject‐matter jurisdiction under the Illinois Constitution and the Marriage Act. The decree incorporated the agreement and conferred continuing jurisdiction to enforce its terms. Nearly thirty years later, George’s collateral attack was barred by res judicata, protecting the finality of divorce judgments.
Attorney Fees and Contempt: Section 508(b) of the Marriage Act authorizes attorney fees when a party intentionally refuses, without compelling justification, to comply with a court order or contract incorporated into a decree. Because the underlying agreement was valid and enforceable, the fee award was within the court’s discretion and properly affirmed.

Impact

The Tronsrue decision clarifies that:

State courts may enforce marital settlement agreements dividing post‐receipt veterans’ disability benefits.
Veterans remain free to contractually allocate benefits once they receive them, subject to ordinary contract and family‐law principles.
Premature collateral attacks on divorce decrees incorporating valid agreements face res judicata barriers.
Family‐law attorneys should draft clear indemnity provisions to reflect parties’ intentions when dividing intangible assets like disability pay.

Complex Concepts Simplified

Federal Preemption: The Supremacy Clause makes federal statutes superior to conflicting state laws. Preemption can be express, implied by field, or implied by conflict.
Uniformed Services Former Spouses Protection Act: Federal law allowing states to treat a portion of military retired pay as divisible property, but prohibits assignment of disability benefits before they reach the veteran.
Marital Settlement Agreement: A binding contract incorporated into a divorce decree that governs property division, support, and related obligations.
Res Judicata: Once a final judgment is entered by a court of competent jurisdiction on the merits, the same parties cannot relitigate the same claims.
Contempt and Attorney Fees: Willful refusal to comply with a court‐ordered decree or contract term may result in contempt sanctions and an award of attorney fees to the aggrieved party.

Conclusion

In re Marriage of Tronsrue reaffirms that voluntary post‐receipt agreements by veterans to share or assign disability benefits with former spouses are enforceable under state contract and family‐law doctrines and are not void under federal preemption principles. Divorce decrees that incorporate such agreements remain subject to enforcement, including contempt and fee awards, so long as the underlying contract was valid when entered and the court retained jurisdiction. This decision strengthens the finality of marital settlement agreements and guides practitioners in drafting enforceable provisions for intangible assets.