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Present Value A Bird in the Hand
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Trading the Present Value of the Retirement BenefitAs of October 8, 2001,1 military members were authorized to begin participating in the TSP. Military members therefore now have both a defined benefit and a defined contribution type of retirement program, both of which should be addressed upon divorce.2 For a divorce occurring while a member is still on active duty, there are even more variables. First is the uncertainty that the member will retire at all - when a member is years from eligibility for retirement, it seems little more than guesswork to evaluate the member’s odds of actually retiring. The precise length of service cannot be known - economic conditions, the defense budget, and world crises all could change the date of separation of a member by several years. Likewise, it is usually impossible to know the rank that such an active duty member will achieve. Each of these factors affects the "present value" assigned to the spousal share. The Supreme Court affirmed. The Court held the fact that the wife was named as the grantee in the deed was insufficient to show a gift from the husband to her. The Court further held that the true test of the separate or community character of property acquired during the marriage ordinarily lies in whether it was acquired by community funds and community credit or by separate funds and that the opinion of either spouse as to whether property is separate or community was of no weight citing to Barrett v. Franke, 46 Nev.170, 180, 208 P. 435, 438 (1922). Some courts have ruled that the 50% limitation is a payment limitation only, so that trial courts may award more than that amount - up to 100% of the retired pay - to the former spouse, but the pay center can only pay 50%, leaving the spouse to collect the remainder from the military member by other means (such as normal state court contempt proceedings if not paid)." The Department of Defense has concurred in this interpretation." B> Many practitioners fail to pay sufficient attention to military retirement benefits when evaluating the community or other property available for distribution upon divorce. This is a mistake; more and more often, retirement benefits are marriages’ most valuable assets, often exceeding the value of all other assets combined - including the equity in any marital residence. This is particularly true in military marriages, in which frequent moves are the norm.1 The district court ordered a trust to turn over assets held in a trust to a receiver. The trust was not joined as a party. The Supreme Court held that the trust must be joined as a party before the district court may order assets held by it turned over. Many of the courts issuing decisions regarding the Variable Separation Incentive (VSI), Special Separation Benefit (SSB), and "Temporary Early Retirement Authority" (TERA) (all discussed above) specifically analogized to the lines of cases regarding disability matters. The analogies flow both ways, and those cases appear in the disability decisions, as well. So it is not at all surprising that on October 22, 2004, the Welfare Division was able to obtain a letter4 from Deputy Attorney General Donald W. Winne reaching the conclusion that the statute was sufficiently ambiguous to allow Welfare to interpret it to permit doing the calculations the way that their computer system was capable of calculating. And on facts where the proposed deviation would benefit the minority time-share parent and child just as much, but not more, than the detriment suffered by the majority time-share parent and child in the majority time-share parent¡¯s household, then deviation would be denied based on the policy reasons set out in Barbagallo and Wesley as to maintenance of a standard of living in the majority time-share parent¡¯s household. This allows judges to take parents¡¯ household incomes into account.1 Ms. Rivero cites to Scott v. Scott, 107 Nev. 837, 840, 822 P.2d 654, 656 (1991), for the proposition that a court can modify a child support order according to the statutory formula without a finding of changed circumstances. In Scott, this court stated that "[a] child support award can be modified in accordance with the statutory formula, regardless of a finding of changed circumstances." 107 Nev. at 840, 822 P.2d at 656 (relying on Parkinson v. Parkinson, 106 Nev. 481, 483 & n.1, 796 P.2d 229, 231 & n.l (1990)). As shown above, a change in circumstances is required to modify an existing child support order. Thus, the statement made in Scott, that changed circumstances is not required, is incorrect. Therefore, to the extent that Scott conflicts with this clarification, we disaffirm that case on that point for two reasons. As a matter of law, it is possible to value the spousal share in at least two ways. The majority of States applying the time rule formula seem to view the "community" years of effort qualitatively rather than quantitatively, reasoning that the early and later years of total service are equally necessary to the retirement benefits ultimately received." Special care is required for reservists who entered service after September 8, 1980, since the formula for figuring their retirement will be altered. If the retirement at issue involves both reserve and active-duty service, the practitioner must be especially careful to allocate the components properly (i.e., points for reserve time, and time for the active-duty period). C) in the case of a division of property, specifically provides for the payment of an amount, expressed in dollars or as a percentage of disposable retired pay, from the disposable ret red pay of a member to the spouse or form er spouse of that member. Many of the courts issuing decisions regarding the Variable Separation Incentive (VSI), Special Separation Benefit (SSB), and "Temporary Early Retirement Authority" (TERA) (all discussed above) specifically analogized to the lines of cases regarding disability matters. The analogies flow both ways, and those cases appear in the disability decisions, as well. P> There are no "survivorship" benefits, per se, for a TSP account, as it is a cash plan like a 401(k). However, plan participants can and should designate beneficiaries to receive the account balance in the event of the participant’s death.1 In the absence of the form, regular intestate succession rules determine the distribution of the TSP account. Depending on the letters used in the alphabet soup, enforcing the divorce decree’s allocation of retirement benefits to the spouse may - or may not - require litigation. SUP> In Gojack,4 the Court spoke of the potential complications arising in a case with certain kinds of facts. The Opinion warned of the dangers risked in granting a divorce without settling property and support issues at the same time. As summarized in the Nevada Family Practice Manual: The Supreme Court affirmed. The Court held the fact that the wife was named as the grantee in the deed was insufficient to show a gift from the husband to her. The Court noted that even if the husband knew that the deed was made to the wife, the presumption would still be that it was community property citing to Milisich v. Hillhouse, 48 Nev. 166, 228 P.307 (1924). The Court further held that the true test of the separate or community character of property acquired during the marriage ordinarily lies in whether it was acquired by community funds and community credit or by separate funds. Property could be vested in either spouse, but the true character of the property is to be determined by the nature of the transaction under which it is acquired without reference to who retains the title. The Court concluded that generally, property purchased by either husband or wife during the existence of the community is community property, the determinative consideration in any case being whether the purchase was made with community or separate funds. The point of the math is that practitioners must look beyond the mere label applied by the statutory or decisional law of a given State to see what it would actually do for the parties before it. This is particularly true when considering which forum would be most advantageous, in those cases in which a choice is possible. The law regarding the member’s filing of a bankruptcy petition during the divorce (before the former spouse’s interest is ruled upon by the divorce court) is not well developed, and the results are uncertain. More is known about the effect of a member’s filing a bankruptcy petition after a divorce court has ruled that a former spouse is entitled to a portion of the retired pay. In practice, the rule has been problematic. Some judges, outraged that their impartiality could or would be questioned by anyone, took retribution on lawyers seeking peremptory challenges. One such conflict caused a virtual civil war in the Nevada judiciary, inflicting wounds all around that still linger, and causing the Legislature to amend the State Constitution to remove from the Supreme Court the power to control judicial discipline proceedings. See Mosley v. Comm’n on Judicial Discipline, 117 Nev. 371, 22 P.3d 655 (2001) (recounting the tragic history of the four separate, drawn-out, and acrimonious cases entitled Whitehead v. Commission on Judicial Discipline I-IV). Some critics complain that such a formula gives the non-employee former spouse an interest in the employee spouse¡¯s post-divorce earnings, at least where the divorce occurs while the employee is still working. They argue that the spousal share should be frozen at the earnings level at divorce; a minority of States, including Texas, have adopted this approach, sometimes in cases that do not appear to have contemplated the actual mathematical impact of the decision reached.1 This minority approach undervalues the spousal interest by giving no compensation for deferred receipt, and also contains a logic problem, at least in a community property analysis, of treating similarly situated persons differently. P> Perhaps the simplest way of determining the meaning of the initial jurisdiction rule is to see what the drafters were trying to accomplish. As documented in an extensive study by the American Bar Association¡¯s Center on Children and the Law,2 inconsistency of interpretation of the UCCJA3 and the technicalities of applying the PKPA, resulted in a loss of uniformity among the States. The Obstacles Study suggested a number of amendments which would eliminate the inconsistent state interpretations and harmonize the UCCJA with the PKPA. As of October 8, 2001,1 military members were authorized to begin participating in the TSP. Military members therefore now have both a defined benefit and a defined contribution type of retirement program, both of which should be addressed upon divorce.2 The mother initiated adoption proceedings. In March, an adoption agency contacted the father and his mother, who allegedly stated that they would go along with the mother’s choice. The baby was born on May 29, and released to the adoptive mother. In June, the adoptive mother filed for termination of the father’s parental rights. He personally appeared at the termination hearing to oppose it, and was confirmed as the biological father. In August, he filed a request for custody or visitation. In February 1997, the father’s request for visitation was denied. In April, the lower court held an evidentiary hearing and terminated the father’s parental rights, finding jurisdictional grounds under NRS 128.105 for abandonment, risk of serious injury if returned to the father, and token efforts by the father. It is irrelevant whether the divorce decree specifies any such benefit, or whether the parties contemplated the benefit. Like Social Security, medical benefits for former spouses who fulfill the legislative criteria have a statutory entitlement separate from the rights and obligations accruing to the member. They cost the member nothing. The third scenario would have the former spouse pay the entire SBP premium. Using the same hypothetical facts, reducing the spousal share from 25% to 19.7861% would free the member from paying any portion of the premium, directly or indirectly.1 The former spouse is still over-secured, as in the prior scenario, and the parties are still left in an unequal position regarding risks and burdens, since the member still has an entirely free survivorship interest on the spouse’s life, and she is paying the entire premium for the survivorship interest on the member’s life. Comparing the range of possible benefits for spouses, the military system is the most restrictive and limited of all federal and private retirement systems. For example, it is not possible to (in ERISA terms) create a "separate interest" retirement for the spouse (only the benefit stream can be divided), and payments to the spouse are limited to 50% of "disposable pay" (discussed in more detail below). Practitioners must thus have a clear understanding of the definitions applicable in the forum State (and, if two possible jurisdictions are in contest, the definitions in the other State, as well). Then it is a matter of discovery, looking at all the usual indicia, which are briefly discussed here. 5) A court order which itself or because of previously served court orders provides for the payment of an amount which exceeds the amount of disposable retired pay available for payment because of the limit set forth in paragraph (1 ),or which, because of previously served court orders or legal process previously served under section 459 of the Social Security Act (42 U.S.C. 659), provides for payment of an amount that exceeds the maximum am aunt permitted under paragraph (1) or subparagraph (B) of paragraph (4), shall not be considered to be irregular on its face solely for that reason. However, such order shall be considered to be fully satisfied for purposes of this section by the payment to the spouse or former spouse of the maximum amount of disposable retired pay permitted under paragraph (1) and subparagraph (B) of paragraph (4). LI> Courts are to look at "residence" of the child when determining the actual custody arrangement that is in place, disregarding such things as time with third party care providers. For the first time, child support can flow "uphill," from a majority time-share parent to a minority time-share parent. You can find Present Value A Bird in the Hand The Tail Wags the Dog Public Employees Retirement System PERS Benefits Section IV What Almost Happend to Child Support in Nevada and Why We Still Have to Fix Public Employee Retirement System PERS Benefits Section II Subsection C Introduction to Nevada law of relocation move cases What Almost Happened to Child Support in Nevada and Why We Still Have to Fi Divorcing the Military and Serving the Civil Service Section I Subsection B Fees incurred on appeal can be awarded The Marren and Page Case List Laws v Ross Milisch v Hillhouse and Verheyden The Marren and Page Case List McKissick v McKissick Redd v Brooke Ohran v S The Marren and Page Case List Kennedy v Kennedy Hitting the Jackpot in Pension Cases Secrets to Getting the Retirement Shar Divison of Military Retirement Benefits In Divorce Section IV Subsection D Present Value A Bird in the Hand available at lvfamilylawyer.com by clicking above. 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