Poor Drafting Leads to Retirement Disaster

Texas law provides that the community estate has an interest in the spouses’ retirement. In Foreman v. Foreman, No. 03-13-00245-CV (Tex. App. – Austin Feb. 19, 2014) (mem. op.), the former husband received military retirement pay based on his service in the United States Army. The community estate’s interest in that retirement equalled a fraction consisting of the number of years the parties were married while the former husband served in the Army divided by the total number of years the former husband served.

In this case, the parties were married for nearly thirteen years, but after divorce, the husband remained in the Army for another ten years. Thus, the fraction would equal approximately 13/23, or about 57% of the former husband’s retirement.

In the agreed divorce decree, drafted by the former husband’s attorney, the court awarded 47% of the former husband’s retirement to the former wife. The court should have awarded the former wife 47% of the retirement earned during marriage, such that the former wife’s community share would equal 57% of 47%, or in other words, 27% of the entire retirement.

Imagine the former husband’s surprise when the Army treated 100% of his retirement as community property and began sending 47% of the entire amount to the former wife.

The former husband sued to clarify the divorce decree to state that the former wife received 47% of the community portion of the retirement rather than 47% of the former husband’s entire retirement. But the court ruled against the former husband because the divorce decree did not restrict the calculation of retirement to the 57% community property share in it. The decree awarded 47% of the retirement to the wife in the following words:

All right, title, and interest in and to 47% of the United States disposable retired or retainer pay to be paid as a result of [former husband]’s service in the United States Army, and 47% of all increases in the United States Army disposable retirement or retainer pay due to cost of living or other reasons, if, as, and when received.

Because the decree did not restrict the retirement award to the retirement earned during marriage, the former wife was entitled to 47% of the former husband’s entire retirement.

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