We were recently hired by a Massachusetts attorney to draft the Domestic Relations Order to divide the husband's pension pursuant to the parties' Divorce Agreement. He works for the Commonwealth of Massachusetts.
As I studied this plan, and worked with the Commonwealth's attorney to decipher the plan's terms, it came to my attention that there was a provision of the plan that allows a "new" spouse to elect her share of any pre-retirement benefit, even if the former spouse was supposed to get a portion of the pre-retirement benefit. The "new" spouse's election will defeat the former spouse's interest, and the former spouse would get nothing!
This kind of caveat to a plan is important to know about if you are the attorney representing the "soon to be" former spouse. People are working far beyond "normal retirement age," and this means more risk to the former spouse's share. THIS IS A BIG DEAL IN THAT THE PENSION IS USUALLY THE PARTIES' LARGEST MARITAL ASSET.
There are also specific options to this plan for post-retirement benefits that need to be considered and addressed in any agreement, which I have not addressed here.
So, what to do?
1. You can make sure there is life insurance in place to protect the former spouse until the "ex" retires. Keeping life insurance in place may not be typical, and in most cases, it must be negotiated.
2. Know the plan options and limitations.
3. Get help from us!
Call 401-841-5700 or see our website at http://www.counselfirst.com/.
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