Texas Divorce Attorney Blog
Retirement can be a complex issue in Texas divorce cases. In some cases, retirement accounts may not be fully vested. In others, retirement income may be subject to periodic increases. When retirement income is subject to increases, the spouse required to make ongoing payments should be sure he or she understands how to calculate those payments in light of the increases.
A former couple recently ended up back in court more than a decade after their divorce due to a dispute over how to calculate retirement increases. The couple married in 1976 and divorced in 1998, after the husband’s retirement from the military. The wife was awarded $754.80 per month of the husband’s retirement, and 60% of all increases “due to cost of living or other reasons…” The husband was ordered to name the wife beneficiary under the Armed Services Survivor Benefit Plan (SBP). The wife was ordered to pay 40% of the cost of the SBP, which was to offset the retirement award the wife received.
In 2012, the wife informed the husband he had underpaid her. His new attorney told him he had been calculating his payments incorrectly. He had been calculating the payment using a method that resulted in payment of 60% of all cost of living increases cumulatively. After receiving advice from counsel, he began paying his wife 60% of the increases only in the first year they were received.
The wife petitioned to enforce the retirement award, claiming she had been underpaid. The husband argued he had overpaid her and that she had not paid the SBP premiums. At trial, the wife testified she was owed more than $7,000 and that she had paid the SBP premiums according to the prior ruling. The husband did not provide evidence of the overpayment amounts or the SBP premiums he claimed were owed to him.
The court found that the wife was entitled to $754.80 per month as her share of the husband’s retirement, and 60% of any cost of living increase in the year it was first received. The court awarded the husband $2,617.57, but did not state how it calculated that amount or how it was allocated between the overpayments and SBP premium underpayments.
On appeal, the wife argued the original decree required the husband to pay 60% of any increases cumulatively. She also argued the evidence was insufficient to support the trial court’s finding she had not paid the SBP premiums as required. The husband argued the trial court had correctly interpreted the original award.
The appeals court considered whether the trial court had sufficient evidence to exercise its discretion and whether the court erred in application of that discretion. Evidence is insufficient if there is a complete absence of evidence regarding a vital fact, the rules of evidence do not allow the court to give weight to the only evidence supporting a vital fact, there is a “mere scintilla” of evidence supporting a vital fact, or the evidence establishes the opposite of the vital fact conclusively. The court errs in the application of its discretion if it makes an arbitrary or unreasonable decision.
The appeals court had previously decided a case with similar language regarding increases in retirement income. In that case, the appeals court held the wife was entitled to the fixed amount plus the percentage of the accumulated cost of living increases. The appeals court referred to the husband’s argument that she only receive the percentage during the first year as “a tortured reading of the divorce decree.” The appeals court noted that the wife’s share is based on the accumulated increase because the husband receives base retirement pay plus the accumulated adjustments.
The trial court abused its discretion in finding the wife was only entitled to the increases during the first year. The appeals court further found that the order improperly amended, modified, altered, or changed the substantive division of property in the divorce decree.
In its opinion, the appeals court rendered judgment clarifying the divorce decree to provide that the wife is entitled to “60 percent of all accumulated increases…” The appeals court found the husband was entitled to nothing on his claim for overpayment of the retirement award. It remanded the wife’s claim to the trial court for proceedings to determine the amount of the underpayments.
The appeals court then considered the SBP premium claim. To succeed on his claim to enforce the premium obligation, the husband had to prove his wife failed to comply with the obligation and prove the underpayment amount. The evidence presented on this issue indicated the wife deducted her premium obligation from the amount the husband owed her and paid him $138.43 each month since 2013. There was no evidence in the record of missing premium payments.
The appeals court found “a complete absence of evidence” supporting the husband’s claim. The trial court abused its discretion by finding the wife had not met her obligation when the evidence was legally insufficient to support such a finding. The appeals court reversed the judgment awarding the husband on his claim for premium payments and rendered a judgment that he receive nothing for that claim.
This case clarifies that an award of increases in retirement income will likely be interpreted to require that the increase in payment to the spouse be ongoing and not limited to the first year unless there is language otherwise. If you have a dispute with your former spouse over property division, an experienced Texas divorce attorney can help you understand your obligations and fight for your rights. Call McClure Law Group at 214.692.8200 to schedule a consultation.