What steps do you need to take regarding your pension when you are going through a divorce. It doesn’t matter if you were the one to file for divorce or if your spouse was. Either way, your pension is in play when community property is divided between you and your spouse. While your circumstances will dictate whether or not your retirement will be divided, you should be aware of the factors at play when discussing pension division in a Texas divorce.
What steps should you take when you are going through a divorce?
Nobody will argue that a divorce is one of the most challenging processes that you will ever have to undertake in your life. It is unenviable to have to go through the emotional turmoil that is associated with divorce. It is also tough to begin to untangle your life from your spouse’s after all-you had planned on building one life with this person and are now going your separate ways, which will be emotionally, logistically, and often financially tricky.
If you have a pension through your employer, you are likely a government employee of some kind. Whether a firefighter, police officer, or city employee, your retirement has to have been one of the main selling points as to why you wanted to work in that field in the first place. Sure, public sector employees don’t make the most money compared to those who work in the private sector. Still, the job security coupled with the retirement benefits you have likely outweighed all the reasons that that job may seem less desirable.
From my experience, the powers that control your pension plan will do the best they can to make sure that your experience in dealing with your pension goes off without a hitch. Your pension plan cannot give you legal advice, so you need to make sure that you have an attorney to guide you in deciding what you want to do in your divorce. The critical thing to remember is that you have options, and you should consider all of them before making decisions about what to do.
Get in touch with your pension plan as soon as you can
Once you file your petition for divorce or file the Answer in response to your spouse’s petition for divorce, you need to get in contact with your employer’s pension plan. The pension plan can assist you in walking you through the next steps of what you will need to do with the program and how the plan’s benefits can be divided into your divorce potentially.
You need to be able to understand what benefits are available to you in the pension. Specific documents may need to be filled out at the beginning of your case to make the actual division of the retirement easier at the end of the divorce. No formal division occurs during the divorce and will only happen pending the results of mediation or trial towards the back end of your case. However, the time to start planning for this should begin as soon as your divorce has already begun.
Your pension counts as community property
Any contributions or benefits accrued within your pension that occurred during your marriage will count as community property. Thus, they are divisible in the divorce. Many people have a hard time understanding this point because your pension is not something you can reach out and grab, but it is an asset and something precious to you. Your spouse will likely have a claim on the community property portion of the pension.
The pension itself does not do anything with the annuity division until it receives instruction from a court. It is bound by the community property laws of Texas and what the court instructs it to do. If you and your spouse can negotiate a settlement in this regard, that can go a long way towards creating a compromise that suits both you and your spouse. Otherwise, you may end up having to deal with an outcome made by a judge that does not work as well for either of you.
Divorces can take longer to complete than you may have anticipated.
The divorce process in Texas is designed to be long enough where you think twice about getting the divorce and short enough to where you will not spend your entire life or your entire bank account legally ending your marriage. The quickest that your divorce can take is two months. Some divorces take closer to a year. Most divorces are done in between 4-6 months. Factors like whether or not you have kids, whether there is a lot of community property that needs to be divided, and the degree to which animosity between you and your spouse can contribute to how long or short your divorce will end up being.
If you and your spouse both have retirement savings available to you, then your pension’s chances of being divided up decrease. Especially if you are a younger person going through a divorce, your spouse may have other goals in mind to divide up property. For instance, if your spouse ends up with primary custody of the kids, she may want to keep the house in the divorce. You keep your pension, and she keeps the house is an agreement that I have seen many spouses arrive at in their divorce.
Another example of a situation where you may not be at much risk for having to divide your pension up in a divorce is one where your annuity has not been contributed to for very long or a case where your marriage has been short. Therefore, with very little play money, your spouse may choose to discuss other areas of the community estate with you.
The other thing that I think is relevant when discussing this topic is that if your pension is not divided up in the final decree of divorce, your spouse cannot come back and attempt to divide it up later in a subsequent legal case. They will get one bite at the apple. The divorce decree must be very clear about how your pension will be divided up if it will be divided up at all.
What is a domestic relations order (DRO)?
Suppose the court has divided up your pension in some fashion, per your final decree of divorce, and you all want your pension plan to make direct payments to your spouse. In that case, the court will need to sign a separate order at the time of your divorce called a Domestic Relations Order (DRO). The DRO must be compatible with your pension plan since the pension plan administrator cannot always divide your pension plan precisely according to how you all decided it should be in your divorce.
Your attorney should ask the pension plan administrator for instructions on how the domestic relations order should be drafted to make sure that there are no problems in getting your spouse their portion of pension once your divorce has concluded. They will probably have instructions or even a draft of a Domestic Relations Order that they can follow when it comes time to create the actual order that resulted from your divorce.
The problem that you do not want to encounter is a situation where the pension plan rejects your order, and you have to start all over again from scratch. Worse yet is a problem where the method you came up with within your divorce does not work with what your pension can do as far as dividing up your strategy and paying your spouse. This is a messy situation that is not easily fixed. However, if you work with your pension plan early in the divorce and then communicate well with your opposing attorney, you can avoid most of these potential pitfalls.
Talk to the pension plan in advance of drafting your order, and they may even have a form that you can use to prepare the declaration. Various state laws need to be met when dividing up a pension plan and individual requirements of your specific project where you will need to accommodate them. For instance, if your calculations inside the DRO or the divorce decree are inaccurate, your pension may reject the proposed order your attorney sends to them.
Do you need to file your domestic relations order with your pension plan?
In most circumstances, you will need to take a certified copy of your domestic relations order and then fill it with your pension plan. This means that once the judge signs the order, your attorney should send the certified copy of the order to the pension plan offices along with a copy of your final decree of divorce.
The pension plan will then receive the certified copy of the domestic relations order and begin to review what has been submitted to them. They are looking for whether or not it meets all the criteria under state law and your specific pension plan guidelines. If you use the form provided to you by the pension plan, you should be in good shape. Once the review is complete, the pension plan will contact both you and your spouse in writing to let you all know if the order is accepted.
How long does this review process take?
It depends on the pension plan administrators and how many other people are ahead of you in the line to have their orders reviewed. From my experience, these folks mean well and will do the best they can, but it will not get done overnight. If you want to have the domestic relations order ready by the end of your divorce, it needs to be submitted to the judge early for his signature and then submitted to the pension plan itself.
Usually, during the waiting period, any amounts of money paid to your spouse will not go to you but will end up in a separate account to be held for your ex-spouse. Once the order is approved, those benefits that have been saved will be released to your ex-spouse. All in all, you need to contact your pension plan administrator to get the information you need to make sure that your order is acceptable to the plan. Your pension may have one person who deals with questions related to divorced persons getting these orders approved.
Questions about retirement and divorce? Contact the Law Office of Bryan Fagan
Going through a divorce is no fun. There are no two ways about that. You can do everything in your power to save your marriage, but when it is time to file for divorce, you need help to do that. Yes, you can file for divorce yourself and represent yourself in that process. However, with so much at stake- your children, finances, retirement, and home- it makes sense to walk with someone who has been through that process before.
The attorneys with the Law Office of Bryan Fagan are equipped to stand with you and advocate on behalf of you and your rights. Our attorneys are in the courtrooms of southeast Texas doing precisely that. If you want to speak with an experienced attorney who knows what you are going through and how to help, please contact our office today. We offer free of charge consultations six days a week here in our office to answer your questions and provide you with direct feedback about your specific situation.
Bryan Fagan, a native of Atascocita, Texas, is a dedicated family law attorney inspired by John Grisham’s “The Pelican Brief.” He is the first lawyer in his family, which includes two adopted brothers. Bryan’s commitment to family is personal and professional; he cared for his grandmother with Alzheimer’s while completing his degree and attended the South Texas College of Law at night.
Married with three children, Bryan’s personal experiences enrich his understanding of family dynamics, which is central to his legal practice. He specializes in family law, offering innovative and efficient legal services. A certified member of the College of the State Bar of Texas, Bryan is part of an elite group of legal professionals committed to ongoing education and high-level expertise.
His legal practice covers divorce, custody disputes, property disputes, adoption, paternity, and mediation. Bryan is also experienced in drafting marital property agreements. He leads a team dedicated to complex family law cases and protecting families from false CPS allegations.
Based in Houston, Bryan is active in the Houston Family Law Sector of the Houston Bar Association and various family law groups in Texas. His deep understanding of family values and his professional dedication make him a compassionate advocate for families navigating Texas family law.
