A Final Decree of Divorce often uses boilerplate language. One example of boilerplate language in a Final Decree is the Retirement Clause. Although the meaning of the Retirement Clause may appear straightforward, questions arise when one party receives money after the divorce.

The Retirement Clause

The Retirement Clause reads as follow:

Assigning to wife/husband “All sums, whether matured or unmatured, accrued or unaccrued, vested or otherwise, together with all increases thereof, the proceeds therefrom, and any other rights related to any profit-sharing plan, retirement plan, Keogh plan, pension plan, employee stock option plan, 401(k) plan, employee savings plan, accrued unpaid bonuses, disability plan, or other benefits existing by reason of the wife’s/husband’s past, present, or future employment.”

Does the Retirement Clause Govern Community Property Received after Divorce?

Often, a lawsuit will arise when one of the ex-spouses receives money after the divorce. The first question, then, is to determine whether the Retirement Clause governs the newly received money. Generally, the clause governs because it operates as a catch-all. But courts may find reasons to rule differently.

In Stephens v. Marlowe, 20 S.W.3d 250 (Tex. App.—Texarkana 2000, no pet.), the court ruled that the ex-husband was not entitled to a portion of the money the ex-wife received. Jennifer argued that the retirement provision governed the $50,000 pension plan and awarded it all to her. James, however, claimed that the $50,000 pension was community property not yet divided by the divorce decree. The court awarded the money all to Jennifer reasoning that the retirement provision unambiguously awarded the money to Jennifer.

In Archibald v. Archibald, 01-08-00015-CV (Tex. App.—Houston [1st Dist.] June 4, 2009, no pet.), the court ruled that the ex-wife was not entitled to a portion of the money the ex-husband received. Larry received over $200,000 in overtime benefits after the divorce for work done during their marriage. Aurore argued that the court should award her a portion of the money because it constituted community property. The court ruled that the divorce decree assigned the overtime benefits to Larry.

In Boyd v. Boyd, 67 S.W.3d 398 (Tex. App.—Fort Worth 2002, no pet.), the retirement provision prescribed a 50/50 split between the spouses. Randall argued (1) that all future increases in value of his defined benefit plans and 401(k) plan were separate property, and (2) that his stock options were partly separate property. First, the court agreed that the post-divorce increases in value attributable to the Randall’s post-divorce contributions were separate property. However, increases in value not attributable to post-divorce contributions were community property. Second, the court ruled that his stock options were entirely community property because Randall’s opportunity to purchase the stock options was due to his management position with the company. So, although a 50/50 split in the divorce decree was uncommon, the divorce decree still governed the property’s division.

See also Pribyl v. Pribyl, 307 S.W.3d 882 (Tex. App.—Austin 2010, no pet.).