Sharing Retirement Benefits with a Former Spouse

Federal Benefit Advisory

When we marry, we make promises and dream of a future together. But, with the promise comes certain obligations that will live on, even if the marriage doesn’t.  The intention of this article is not to counsel whether you can save your marriage or take all with you when the split happens, but to bring a bit of reality to a tragic event.

Whether there are children or not, there will be property:

Definition of Property:

“Property is any item that a person or a business has legal title over. Property can be tangible items, such as houses, cars, or appliances, or it can refer to intangible items that carry the promise of future worth, such as stock and bond certificates. etc”

So, what was your property?  This would be your joint ownership in your home, a business, the car(s), boats, jewelry and even your beloved ‘Moose Head Collection”. There is also a ‘property’ that is not always considered, until that day in court, that being your federal benefits.

Your federal benefits are a here and now and they are a sometime later benefit, now being FEHB, current income and later being your Retirement Annuity (pension) and TSP. I have been asked 1000 times, “George, there has got to be a way I can get around sharing ½ of my TSP (or pension). I  must respond that “I am not your legal counsel” so here is the heart of the matter; there is one authority over this issue, that being your local divorce court.

When any legal action, in this case a divorce, occurs, the way to undo the marriage is through the local court, usually a county superior court. You, your attorney, your ex’s attorney haggles out the property settlement, including distributions of your federal benefits. In most cases, a proportional share, such as: you were married the day you hired on to your federal job, at exactly halfway through your 30 years, you divorced, Likely settlement will be 50%. If your spouse has a retirement and benefits, then this is considered and perhaps not sharing is required.

Once a settlement is agreed, the judge pounds the gavel, and it goes into the record and a Court Order is issued and put on file with OPM. A court order may be limited to certain assets, but when it comes to your retirement and TSP, the court order is called a QDRO.

Qualified domestic relations order (QDRO):

Is a decree or court order that requires that a portion of a retirement plan be assigned or paid to another person, such as a spouse or dependent, in the case of a divorce. Typically, during a divorce, the couple’s assets are divided, but since that split doesn’t automatically extend to retirement plans, a QDRO is used.  If there are reason to feel the QDRO is unfair, you must engage your legal counsel and re-visit the court.

Common Law Marriage:

A common law marriage is one in which the couple lives together for a period of time and holds themselves out to friends, family and the community as “being married,” but without ever going through a formal ceremony or getting a marriage license.  Here, the subject becomes a little precarious:

  • Not all states recognize a Common Law Marriage.
  • If you reside in a state that recognizes a Common Law Marriage, you may be married.
  • If you reside in a state that does not recognize common law marriage, your are not married.
  • If you resided in a state that recognized a Common Law Marriage, then moved to a state that did not, OPM will still recognize your marriage.
  • If you reside in a state that does not recognize Common Law Marriage, but you have dependents, hold on, because you may still have an obligation.
  • SEEK LEGAL COUNSEL, regardless.
  • OPM has issued a brochure on Common Law Marriage and your FEHB benefits.

The states that recognize Common Law Marriage:

Colorado, Iowa, Kansas, Montana, New Hampshire (for inheritance purposes only), Oklahoma, Rhode Island, South Carolina, Texas, Utah and the District of Columbia

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