A divorce can affect a person’s various retirement accounts. Federal employees often utilize a type of savings account called the Thrift Savings Plan or TSP. Certain guidelines govern how the TSP can be handled during the property division portion of divorce proceedings. A recent news article gives details that Wyoming residents may find informative.
No federal law exists that governs how the Thrift Savings Plan should be split between spouses in the event of a divorce. The division is then left to whatever agreement a person can make with his or her soon-to-be ex, or it will fall under the law of the state in which a person resides. In order to divide the TSP, a person will need to have a Retirement Benefits Court Order (RBCO), which is basically the divorce agreement document. The guidelines for the proper form of a RBCO can be found in the TSP guidebook.
The account will be frozen until the divorce is finalized. Any outstanding loans are included in the account balance for the purpose of calculating spousal awards. The final court order can give the award as either a dollar amount or a percentage of the total, but it will not exceed the total balance of the account.
Splitting retirement accounts is just one aspect of property division during a divorce. Wyoming residents may have questions about the remaining details of the divorce process. Individuals who desire assistance with filing for divorce can choose to enlist the services of a knowledgeable family law attorney.
Source: fedweek.com, “Understanding how divorce affects your TSP“, Aug. 7, 2017