Articles Posted in Pension Plan

does-adultery-affect-alimony-in-idaho-1080x600-1When the parties to a Texas divorce agree on a property division, they may agree that certain obligations or conditions must be met.  If a party fails to meet their obligations as agreed to and set forth in the divorce decree, they may not be entitled to the property they were expecting.  In a recent case, a husband challenged a court order requiring him to reimburse the wife for certain tax liabilities after she failed to provide him the documentation required to calculate the amount he owed in accordance with the decree.

Wife Fails to Comply with Requirements of Divorce Decree

The parties’ mediated settlement agreement was incorporated into their divorce decree. The decree required the wife to withdraw funds from the husband’s pension plan. After paying certain debts, her attorney was to distribute 30% of the remainder to the wife and 70% to the husband. The decree required the husband to reimburse the wife 70% of her income tax liability for those funds. The decree ordered the wife have two draft income tax returns prepared, one showing the pension plan funds as income and the other not including the funds, to allow the husband to calculate that reimbursement. She was to provide the husband with the draft returns by June 1 of the year after the year the funds were liquidated.

The wife hired a tax preparation company.  The first draft return was a joint return with her new husband and included his wages, her wages, her social security disability income, and the liquidated pension plan funds.  The second draft return indicated it was a joint return, but only included her wages.  She sent the drafts to the husband before the deadline. He informed her he needed a draft return that included only her wages and the liquidated pension plan funds.  The wife went back to the tax preparer multiple times, but said they kept getting it wrong.

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retireRetirement benefits can be a complex and contentious issue in a Texas divorce case.  Generally, any income earned during marriage is considered community property unless proven to be separate property, including funds contributed to a retirement account or earned as pension benefits.  In a recent case, a husband challenged a court’s order awarding a portion of his military retirement benefits to his ex-wife.

According to the appeals court’s opinion, the wife petitioned for enforcement of property division by contempt, alleging the husband had not paid her the retirement benefits awarded to her in their divorce decree.  The husband argued the military benefits had either been awarded to him or had not been divided at the time of the divorce.

The wife filed an amended motion to clarify, asking the court to enter a clarifying order if it found any part of the previous order was not specific enough for enforcement through contempt.  She specifically asked the court to clarify the order to reflect the length of the marriage and the husband’s dates of military service.  She also asked the court to sign a Military Qualified Domestic Relations Order.

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Many of you may know about ERISA, but for those of you who do not, here is a quick run down:

ERISA is the Employee Retirement Income Security Act of 1974. It is a federal law that sets minimum protective standards for almost all voluntarily established pension plans in the private sector.

Just recently, the D.C. Circuit Court held in Vanderkam v. Vanderkam that ERISA preempts a party’s attempt to use state law to seize a benefit that federal law has vested in a spouse or former spouse entitled to a survivor annuity. ERISA usually bars alienation or waiver of a spouse’s survivor annuity unless the spouse waives the annuity in writing in conformity with section 205 of the content and timing rules of ERISA. This may sound confusing, so let me give some background on this issue…

John Vanderkam was employed by a corporation and was a participant in the pension plan. He married the defendant, Melissa Vanderkam in 1984 and designated her as a 100% beneficiary of his joint and survivor annuity of his pension plan, paid upon his death. John retired in 1994, at which time the survivor annuity vested in Melissa while John began to receive his monthly benefits from the pension plan. In 2002, John and Melissa divorced. This is where it all gets tricky… Continue Reading ›

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