Survivor benefits related to a retirement plan are a potential trouble spot in family law cases. They may be treated as separate assets that can be valued, or as part of the marital portion of a pension, depending on how the issue is framed. As to the former approach, because survivor benefits are often non-liquid, they are difficult to value.
Further, survivor benefits are generally non-transferable. In Boggs v. Boggs, 520 U.S. 833 (1997), the Supreme Court of the United States held that a spouse cannot transfer undistributed retirement benefits by will and that ERISA prevents testamentary transfer of undistributed pension benefits by a nonparticipant spouse, but explicitly provides for the allowance of transfer during a divorce by QDRO.
In order to properly secure a survivor benefit, it is imperative that the parties’ settlement agreement and/or Final Judgment specifically reference the type of survivor benefit being assigned, the level of coverage, and if there is a cost associated with such coverage and it can be apportioned (this is not always possible), then said cost should be addressed.1
Attorneys who practice in the field of marital and family law are well advised to prepare for mediation and the drafting of a marital settlement agreement by consulting with an attorney who specializes in the preparation of qualified and related domestic relations orders.
1 The content of this blog was provided by Attorney Matthew Lundy: https://www.mlundylaw.com/