In Divorce Disputes Over Retirement and Pension Benefits, the Devil is in the Details

In divorces, disputes over how to divide retirement and pension benefits are common – and often messy.

At issue is whether one spouse is entitled to receive a portion of the other spouse’s retirement or pension payout as part of the divorce settlement. This requires a court order, with a common order being referred to as a QDRO, short for Qualified Domestic Relations Order. Others include Division of Property Orders (“DOPO”), Retirement Benefits Court Orders (‘RBCO”), Court Order Acceptable for Processing (“COAP”), etc.

These payouts often involved defined contribution plans, such as 401ks, and defined benefit plans, such as pensions. In Ohio, there is precedent from the Ohio Supreme Court that provides some guidance about how careful family law attorneys must be in the divorce decree about the terms of these orders.

The high court set that precedent in 2019 in Walsh v. Walsh, in which a man filed for divorce after 13 years of marriage (though the couple had been separated for the seven years before the filing). The trial court issued a divorce decree stating the terms for the division of the husband’s military pension. There were a few caveats in that decree: The wife’s share of the pension was not stated in dollars or percentages, and their marriage duration was stated to be 6 years (and not the 13 years they actually were married). A 6-year marriage did not satisfy the 10/10 Rule (10 years of military service during 10 years of marriage) for the wife to receive her share of the military pension directly (rather than by husband getting paid and then having to pay a portion to wife).

These problems were uncovered when, after the decree issued, the wife presented to the military an order for the pension division that was rejected. So, the wife asked the trial court to fix these problems by amending the decree, to which her husband objected.

The trial court sided with the wife and amended the decree to say the marriage duration was 10 years and the percentage she would receive was 15%. On appeal, the 11th District Court of Appeals sided with the trial court.

The case then went to the Ohio Supreme Court, which reversed the 11th District Court of Appeals and sent the case back to the trial court. The divorcing husband prevailed.

Why? By statute, a divorce decree cannot be modified UNLESS the parties agree to a modification in writing. The Ohio Supreme Court held that the trial court modified the divorce decree without the husband’s consent.

Where did that leave wife – with an inability to present an order to the military to get a share of her husband’s pension!
The lesson: the devil is in the details, and where possible, an order to divide one party’s retirement accounts or payouts should be prepared and, if possible, pre-approved by the administrator of the account/plan BEFORE a couple finalizes their divorce.