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Retirement Benefits and COLA in Texas Divorce

statueIn a recent Texas appellate decision, a wife appealed from an order that denied her petition to enforce and to clarify the divorce order. The husband and wife had divorced in 1990 and stipulated to the divorce decree. At that time, the husband had retired from the United States Army and got retirement pay on a monthly basis. The divorce decree determined that the community interest in the monthly retirement benefit was 80%, and the cost of living-related increases would be made periodically and would likely need to occur in the future.

The wife was awarded a portion of the retirement benefit. The wife was entitled to 50% of the cost-of-living increases (COLA) to which the husband would become entitled from the date of the divorce to the death of the husband. In 2000, the wife asked the court to clarify the divorce decree and enforce her part of the COLA.

The judge decided she was entitled to $774.02 as her portion of COLA benefits that hadn’t already been paid by the husband. She appealed. The referring court adopted the judge’s finding that she could get clarification of the divorce decree and that she should be given 50% of the COLA benefits. It reversed the exact amount that should be awarded. Specifically, it ordered that she would be entitled to $391 each month of the retirement pay plus half of any COLAs when they were received. She was awarded $7,628 for all of the past COLA payments that the ex-husband had not paid. Nobody appealed this award.

In 2008, the ex-wife again attempted to get clarification and enforce her right to a share of COLA benefits. She asked the court to find the husband in contempt for failing to pay the amount previously awarded. The judge ordered in her favor, but the husband didn’t appear at the hearing. Over two years later, the husband filed a bill of review.

The parties had two different interpretations of the divorce decree and clarification order. The wife argued she was due 50% of the accumulated COLA with an eye toward adjusting income to present-day dollars. The husband argued that the wife had been awarded a precise dollar amount, rather than a percentage of retirement, so she either wasn’t entitled to COLA or her portion had to be calculated on a yearly basis. The court ruled in favor of the husband and adopted his interpretation. It found she was due $53,958 for her share of retirement and only $763 in COLA payments. It found the husband had overpaid $22,080.39.

The wife appealed. She argued the trial court had erred in calculating what she was owed in COLA benefits. The appellate court explained that a court that makes a divorce decree related to property division keeps the right to enforce and clarify it, under Texas Family Code sections 9.002, 9.006, and 9.008.

Under Section 9.006(a), the court can make other orders to enforce a property division. It can’t give retroactive effect to a clarification or enter an order that alters the substantive property division in the divorce decree. The husband in this case argued that the wife’s interpretation of the order amounted to a modification of the property division award. The appellate court disagreed. It reasoned that the divorce decree had awarded her a fixed sum as well as 50% interest of all of the COLA to which the husband became entitled. The wife’s share of the COLA was based on how much COLA the husband accumulated. The appellate court found that the trial court had incorrectly concluded the wife did not deserve a proportionate share of the COLA and had denied the request to hold the husband in contempt. The court provided that the wife could recover a set amount of retirement benefits along with 50% of the COLA increases up to his death. It sent the case back to the trial court on other issues.

If your divorce involves matters related to property distribution, contact the Texas attorneys at the McClure Law Group at 214.692.8200.

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