A Florida military divorce can present unique challenges. Among them are jurisdictional issues and how to deal with certain assets, including a thrift savings plan. There are some basic facts about the division of a thrift savings plan that need to be understood.
Dividing a thrift savings plan
The division of a thrift savings plan in a military divorce, annulment or separation proceeding cannot be accomplished merely through a final decree entered in the case. Additionally, a qualified domestic relations order or QDRO is not legally sufficient to divide and distribute assets in a thrift savings plan.
In order to accomplish the division of a thrift savings plan in a military divorce, annulment or separation proceeding, a retirement benefits court order or RBCO is needed. An RBCO sets forth how a thrift savings plan is to be divided between spouses.
What can and cannot be done when an RBCO is in place
Additionally, an RBCO freezes a thrift savings plan account until further order of the court. The “freeze” component of an RBCO prevents a person from making withdrawals from a thrift savings plan account. The freeze component of an order also prevents a person from taking out a loan from the subject account.
On the other hand, an RBCO does not prevent a person from making contributions to a thrift savings plan account. Contribution allocations can also be altered when an RBCO is in place. Investment decisions relating to the account continue to be made. If a preexisting loan exists, loan payments still are made. Due to the unique requirements associated with a military divorce, an individual facing this type of marital dissolution proceeding is wise to retain legal counsel with specific experience in this area.