BEWARE THE UNEQUAL DISTRIBUTION OF THE COMMUNITY INTEREST IN YOUR PENSION PLAN IF YOUR INTENTION IS TO AWARD THE SURVIVOR BENEFIT ENTIRELY TO ONE SPOUSE.
In In re Marriage of Cooper (2008) 160 Cal.App.4th 574, the Court of Appeal, Second District, reversed the trial court’s allocation to Wife of the entirety of Husband’s CalPERS retirement system survivor benefit. Wife was the sole designated beneficiary of the option 2 survivor benefit, and the designation was irrevocable unless the trial court awarded Husband the total interest in the retirement plan. Husband appealed. Husband had presented evidence showing that if he were to predecease Wife the survivor benefit then payable to her would far exceed the value of Wife’s community property share of the benefits. The Court of Appeal reversed, holding that under the circumstances the trial court’s discretion may reasonably be exercised in only one way: by ordering Husband to buy out Wife’s community property share of the retirement benefits including the survivor benefit. A petition for review was filed with the California Supreme Court on April 8, 2008.BEWARE THE CONSEQUENCES UPON YOUR ESTATE PLAN WHEN CONTEMPLATING DIVIDING COMMUNITY PROPERTY UPON DIVORCE.
A recent case clearly illustrates the potential consequences of estate planning on future property division at divorce. The court said that an agreement reached in a trust to transmute separate property into community property for tax and estate planning purposes, will be binding on the parties if they later get divorced. In re Marriage of Holtemann, 83 Cal.Rptr.3d 385, Cal. App. 2 Dist., 2008.
WHEN A GIFT IS NOT A GIFT. WHAT EVERY MARRIED PERSON NEEDS TO KNOW ABOUT
By Frieda Gordon, Esq.