Articles Posted in Retirement Assets

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For the tens of thousands of military members and their families who live in California, government benefits often help them remain financially secure. Those benefits and the programs under which they’re provided can also raise unique issues when a military member and his or her spouse decide to divorce. California’s Third District Court of Appeals recently considered some of these issues.

soldiersHusband and Wife divorced in 2003, following 29 years of marriage. They entered into a marital settlement agreement at the time of the divorce, which laid out how they split community assets and other property. Husband served in the U.S. Navy for 17 years during the marriage and began receiving military retirement benefits in 1991. The spouses stipulated in the agreement that Wife’s share of Husband’s military retirement benefits was about $475 per month. Wife waived her right to a piece of Husband’s Social Security and disability benefits, as well as “any and all work related benefits,” under the terms of the agreement.

Husband was diagnosed with post-traumatic stress disorder related to his tours of duty in the military. After the spouses divorced, the Department of Veterans Affairs offered him special combat-related compensation in lieu of his retirement benefits. Although the amount was the same as his retirement benefits, the combat-related compensation wasn’t subject to taxes. Husband accepted the change in benefits and stopped paying half to Wife. A trial court eventually sided with Wife, however, ruling that she was entitled to continue receiving $475 per month. The court said the agreement was intended to ensure that Wife kept getting her original share of the benefits, even if Husband opted not to receive them.

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image divorce family lawIn a divorce or dissolution of marriage, California courts, like a handful of other states, divide all real and personal property based upon “community property” laws. California courts will first classify property as community property or separate property. Generally, courts will presume property acquired during a marriage to be community property and property acquired outside of or prior to the marriage to be separate property. Each party keeps their separate party while equally dividing the community property.

At first blush, community property laws seem very methodical and straight forward; however, considering the array of property a couple may accrue over their life and within the marriage, the rules can quickly become complicated and confusing. You do not have to become overwhelmed with the complex rules if you have an experienced and knowledgeable San Jose Divorce Lawyer on your side.

In re Marriage of Green
Last summer, the California Supreme Court (“SCT”) decided whether a divorcing spouse has to share a pension increase from upon a service credit earned prior to the marriage. In the case, In re Marriage of Green, the husband had served in the Air Force prior to the marriage. After his military service, he joined a fire department that participated in the California Public Employees’ Retirement System (“CalPERS”). Cal. Gov. Code § 21024 allows members of CalPERS to take credit for previous public service, including military service, for up to four years. Members can make contributions to gain the service credit which will increase their pension. The Air Force veteran married and, during the marriage, started making contributions to claim this service credit. Upon divorce, the parties disputed over whether to classify the military service credit as separate or community property. Continue reading