Category Archives: Divorce

Are Texas Teacher’s Retirement System Benefits Subject To Division In Divorce?

The Teacher Retirement System of Texas (“TRS”) provides retirement benefits for teacher’s across the State of Texas. It is one of the State’s largest benefit programs.

But are those retirement benefits subject to division in a divorce? The answer is, yes, they are subject to division to the extent that they are community property.

Note – this article discusses retirement benefits under the TRS system and not disability or death benefits.

TRS Benefits Can Be Community Property

The same community property rules that apply to other types of property apply to TRS benefits.

This means that there is a presumption that TRS benefits are community property. A teacher-spouse claiming that a TRS benefit is separate property during a divorce must show that the benefits were earned prior to marriage or that there was a marital agreement between the parties characterizing the assets as separate property.

To the extent the TRS benefits were earned during marriage, they are community property and subject to division during a divorce.

TRS Benefits Are A Defined Benefit Type of Retirement Account

Defined benefit accounts provide a fixed benefit for a period of time during retirement. The amount of the benefit is usually determined by a formula based on the length of the employee spouse’s employment and the employee spouse’s salary.

TRS retirement benefits are calculated based on a member’s salary during their 5 highest years of compensation. That average is then increased based on the length of service.

You can learn more about how benefits are calculated by visiting the Teacher Retirement System of Texas website.

TRS retirement benefits may be paid through a lump sum at the time of retirement or through installment payments.

What Part of TRS Benefits Are Subject to Division?

The process of dividing TRS benefits can be complicated.

To the extent that all of the teacher-spouse’s credit under the plan was earned through employment during the marriage, the entire benefit is subject to a just and right division during divorce as of the time of divorce. More on that later.

If some of the teacher-spouse’s credit in qualifying for benefits under the plan was earned through employment prior to marriage, then there is a formula to determine what portion of the benefit is community property and subject to division.

You take the total number of months that the teacher-spouse worked and earned credit during the marriage then divide that by the total number of months the teacher-spouse worked and earned credit. This gives you the percentage of the benefit that is subject to a just and right division during divorce as of the time of divorce.

The actual benefit the teacher-spouse is entitled to under this type of plan is usually determined by some formula involving years of service and salary. In addition, at the time of divorce, the teacher-spouse’s right to receive benefits may not be fully vested but the plan is subject to division regardless.

There are other issues that complicate the division of TRS benefits as well.

For example, the divorce may be years before any actual payments are due under the Teacher Retirement System of Texas plan.

In addition, any increase in the benefit’s the teacher-spouse will receive that is attributable to that spouse’s employment after divorce is his or her separate property and not subject to division. This is why the non-employee spouse’s interest is determined at the time of the divorce.

How TRS Benefits Are Divided In A Divorce

The legal mechanism for dividing TRS benefits in a divorce is through a Qualified Domestic Relations Order (“QDRO”).

The QDRO is a court order to the Teacher’s Retirement System of Texas directing them to make alternative payments of the teacher-spouse’s retirement benefits to the non-teacher spouse.

Texas law specifically allows for direct payment of those retirement benefits from the Teacher’s Retirement System of Texas to the non-teacher spouse.

Alternatives To Dividing TRS Benefits

In many cases, if the marital estate permits, it may make more sense to use an alternative to dividing TRS Benefits.

This does not mean that the non-teacher spouse is deprived of the financial value of his or her interest in the TRS Benefits. It merely means that the non-teacher spouse receives the economic benefit of that interest from another source.

For example, the non-teacher spouse could be “bought out” of his or her interest by the teacher-spouse. This could be by payment from separate property funds of the teacher-spouse or periodic payments after the divorce.

Another option is to award the non-teacher spouse offsetting property. In this case the non-teacher spouse receives other community property of equal value to his or her interest in the TRS Benefits rather than going through the process of dividing those benefits.

Does My Child Get To Decide Which Parent They Will Live With?

Child custody is always a contentious issue in any divorce. One of the more common myths I hear from prospective divorce clients is that their child is over the age of 12 and wants to live with them so custody isn’t an issue.

That simply isn’t true as I will explain below.

A Quick Note On Conservatorship Versus Possession and Access

Let’s take a moment to look at the difference between conservatorship as opposed to possession and access under the Texas Family Code.

In simplest terms, conservatorship refers to decision making authority.

Possession and access refers to having physical possession of the children during defined periods of time. This is more of the traditional understanding of custody.

The Significance Of Your Child Being 12 Years Old In A Divorce

So where does that myth I discussed above come from? It comes from a misunderstanding of what the law says.

The Texas Family Code provides that upon application of a parent, the judge shall interview a child age 12 or older in chambers on the issues of conservatorship or which parent should have the right to determine the child’s primary residence.

The Texas Family Code provides that upon application of a parent, the judge may interview a child under the age of 12 in chambers on the issues of conservatorship or which parent should have the right to determine the child’s primary residence.

The law also provides that upon application of a parent, the judge may interview a child in chambers to determine the child’s wishes on the issues of possession, access, or any other issue affecting the parent-child relationship.

But The Judge Still Decides

The judge will still be the ultimate decision maker on the issues of conservatorship, possession, and access. The legal standard for making that decision is what is in the best interests of the child.

The child’s wishes as expressed to the judge during any interview are merely one factor that the judge can consider in making a decision.

When Will The Child’s Wishes Carry More Weight?

There are a number of circumstances in which the child’s wishes will carry more weight.

For example, an older teenager’s wishes will carry more weight for the simple reason that it is difficult for a court to control the child.

If you tell a 17 year old with a car that he has to live with dad but he wants to live with mom – guess whose house he will end up at regardless of what the court says?

The weight of the child’s wishes will also depend on how well thought out the child’s decision making appears to the judge.

A child stating that he or she wants to live with one parent over the other carries more weight if it is supported by well thought reasoning.

The judge will not simply ask which parent the child wishes to live with but also attempt to explore the reason behind that decision.

This leads to another factor – the child’s wishes will carry less weight if it appears to the judge that they are based on inappropriate influence from one parent or the other.

For example – telling a child that you will let him play video games all day if he tells the judge that he wants to live with you is a bad move.

One More Note Of Caution

Children tend to be a lot smarter than parents give them credit for both intellectually and emotionally.

Children know when a divorce is happening. They see the discord and conflict between parents. They see the emotional toll it takes on mom and dad.

Most of them have friends with divorced parents so they know at some point they will end up living with mom or dad.

It is not uncommon for a child to try to cheer up a parent by telling them that they want to live with them – even while telling the other parent the exact same thing. The child is merely trying to keep their parents happy.

So even if your child assures you that you are the parent they want to live with – be careful asking for them to testify as you do not know what they will say to the judge.

You should evaluate the child custody issues objectively understanding that the child’s opinion is one factor and the the ultimate decision will be based on what is in the child’s best interests.

Can My Spouse Avoid Paying Child Support By Quitting His or Her Job?

It is not uncommon for a spouse ordered to pay child support in a Texas divorce proceeding to have a change in income after the divorce.

Sometimes that happens for reasons beyond their control, such as layoffs or a need to change their lifestyle following the divorce.

But sometimes a parent will attempt to manipulate their child support obligations by intentionally reducing their income by changing jobs or reducing the hours he or she works.

So what impact does that have on the parent’s child support obligation?

The Impact

This is an unfortunate situation as the impact of a reduction in income or loss of a job has a negative impact on the child.

When a job is lost or income reduced due to normal economic conditions or reasonable changes in circumstances, it is unfortunate.

When a job is lost or income reduced in an attempt by one parent to reduce the child support that the other parent receives, it is purely malicious and harms the child’s well being.

Understand How Child Support Is Paid In Texas

Before going further, it is important to understand how child support is usually paid in Texas.

At the time the court enters a final decree of divorce, the court will also sign an income withholding order for the child support payments.

That income withholding order is then sent to the obligor parent’s employer as well as any subsequent employer.

The employer then deducts the amount set out in the income withholding order from the spouse’s paycheck and sends that amount to the Attorney General’s Child Support processing unit.

The AG’s office then sends payment to the parent receiving payment of child support. But that payment is dependent on the obligor parent’s receiving income.

If the parent ordered to pay child support has no income – then no funds are withheld and sent to the AG’s office. This means no payment of child support is made to the parent receiving the support.

Impact Of A Reduction In Income

First, let’s look at the impact of a reduction in income for the parent ordered to pay spousal support.

Initially, nothing changes as the amount of child support that parent is required to pay can only be modified by court ordered.

So long as the parent’s paycheck includes enough income to withold the child support in full, then that amount is withheld and paid through the AG’s office.

But in this case the parent can seek a modification of the child support order with the court.

In order to get a court order modifying the child support amount, the parent will have to show a substantial change in circumstances or that the amount he or she should pay under the child support guidelines as applied to current income is at least $100 less than the prior order.

When the parent paying support files for a modification, the parent receiving support will receive notice of the motion and have an opportunity to challenge that modification.

If the parent contesting the modification can show that the reduction in income is due to intentional underemployment or an intentional reduction in hours, then the modification will likely be denied.

This has the effect of leaving the economic burden of the lower income on the spouse seeking to game the system.

Impact Of Intentional Unemployment

But what happens if the parent ordered to pay child support simply refuses to work?

In that case – the parent receiving child support will not receive any payments because there is nothing being withheld from the other parent’s paycheck.

That leaves the entire burden on the child.

The parent ordered to pay child support might seek a modification to reduce the amount owed – but the parent receiving support will have an opportunity to challenge that modification as discussed above.

If the parent is intentionally unemployed, then the court will likely not grant a reduction in the child support payments.

But the child support obligation does not go away.

Instead, the unpaid amounts accrue as unpaid child support. The Attorney General’s Child Support Division maintains a record of payments and missed payments.

Once that parent is re-employed, withholding will continue and the spouse entitled to receive child support can seek to have the withheld amount increased to begin making payment on the missed child support payments.

There are also other collection options available that are beyond the scope of this article.

If you would like to schedule a consultation to discuss your divorce case, then please send me an e-mail or send a request through my contact page.

Divorce Concerns For High Net Worth Couples

When a couple with a high net worth files for divorce in Texas it often involves a number of unique issues and concerns. This articles highlights some of the issues and concerns that frequently arise in a divorce involving high net worth couples. Existence of Martial Property Agreements A divorce involving a high net worth… Continue Reading

Getting Organized For Your Divorce

I recently wrote an article discussing How to Prepare Yourself For Divorce that focused on preparing yourself mentally and physically for the divorce. This article discusses how to get organized for your divorce so that you have the best outcome possible. The Importance of Getting Organized Any lawyer will tell you that an organized client… Continue Reading

Preparing Yourself For Your Divorce

This article isn’t about the law. It isn’t about the divorce process. It isn’t about dividing your property or child custody. This article is about you and making sure that you are truly prepared when you make the decision to seek a divorce from your spouse. The Importance of Preparing Yourself Divorce is hard. Especially… Continue Reading