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Overseas Pension Plan Will Not Recognize U.S. Divorce Judgment

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  • 08-22-2010, 06:52 AM
    usmprez
    Overseas Pension Plan Will Not Recognize U.S. Divorce Judgment
    My question involves divorce in the State of: FL

    I was divorced in Florida 15 years ago and still live there. During my divorce and subsequently no QDRO was ever completed. My ex-wife who now lives overseas was awarded 50% of my pension with an overseas company and the divorce judgment states that "the ex-wife is awarded a one half interest in the husband's pension and that the ex-wife's interest in this asset is meant is meant to survive the death of the husband".

    I presume that as I am only around 2 years away from retirement my ex-wife wrote to me recently requesting that I contact the pension company to obtain a "pack" that would allow her to be paid directly. When I received the reply from the company they are stating very clearly that they will not recognize a US divorce judgment, will not pay her directly and will not recognize her for any benefits past my death. In other words they will only deal directly with me.

    How do I stand given this is totally at odds with the divorce agreement, particularly with regards to the survivor benefits?
  • 08-22-2010, 09:31 AM
    Scott67
    Re: Overseas Pension Plan Will Not Recognize Us Divorce Judgment
    Your divorce judgment cannot change the provisions of your pension plan or the obligations of the company paying the pension. While we cannot see your pension agreement, assuming that the pension is for you for as long as you live, you or she cannot in a divorce agreement extend 50% of the pension to extend for her life. Even if the pension plan contains a provision for a person who is your spouse at the time you retire, your divorce agreement cannot make them extend that benefit to a person who was previously your wife.

    I would notify her that you requested that the company pay her directly and that they have refused, so you will pay her yourself as you receive your pension payments. As far as her attempting collect from the pension company after your death, I would leave that for her to deal after you die. If you want to tell her anything, tell her that they have said they will not pay, but she is free to contact them after your death to try to convince them otherwise.

    If your concern is that there are survivor benefits in the policy and that you have a current spouse who will receive them under the policy, then your current spouse is the one the policy will pay after your death. She was not a party to your divorce agreement and cannot be forced to giveup her assets because of a clause in your prior divorce agreement with you no longer on the scene. Your ex-wife could try to collect from either the insurance company or from your current wife, but unless there are some very strange extenuating circumstances, I do not see how she could prevail.
  • 08-22-2010, 10:15 AM
    usmprez
    Re: Overseas Pension Plan Will Not Recognize Us Divorce Judgment
    Scott67

    Thanks for the response and the info which is somewhat comforting. Is paying her directly going to have adverse tax consequences for me? Obviously memories dim over 15 years, however I recall that her attorney was to contact the plan to make sure the provisions in the judgment could be applied. She came back with a story that they wanted a fee of a couple of hundred bucks to set it up and her client didn't want to fund any part of it. In the letter I received from the pension company they stated that whilst they would't recognize it they did have a copy of the divorce judgment on file. This would be consistent with her attorney having sent them the judgment, finding out they wouldn't accept it, coming up with a bs story about costs and then just blowing it off.
  • 08-22-2010, 10:52 AM
    Scott67
    Re: Overseas Pension Plan Will Not Recognize Us Divorce Judgment
    On the tax consequences issue, while there may be other things that come into play, the simple answer is that pension income is income to you and the payment you make to her should be deductible to you. Your tax adviser will be able to help you sort it out. I'd have to know far more about your finances to give you answer better than that.

    From your first post "is meant" is a very weak term used in contracts to mollify a party demanding something that the other party has no power to grant. It places no obligation on the other party to do anything to make it happen. Quite likely both attorneys were aware of that when your divorce agreement was finalized. Her attorney contacting the pension company certainly makes it clear that you were not expected to take any action. Her pressuring you to do anything now to assist her is nothing more than you care to make of it.
  • 08-22-2010, 01:47 PM
    usmprez
    Re: Overseas Pension Plan Will Not Recognize Us Divorce Judgment
    Scott67:

    Thanks for your opinion and your time. You have made me feel much better!
  • 08-22-2010, 11:05 PM
    Scott67
    Re: Overseas Pension Plan Will Not Recognize Us Divorce Judgment
    You are welcome. Good luck to you.
  • 08-22-2010, 11:32 PM
    Mr. Knowitall
    Re: Overseas Pension Plan Will Not Recognize U.S. Divorce Judgment
    You're being issued checks from an overseas corporation through an overseas bank? Or you're being paid through a domestic subsidiary or branch office? If the latter, they're subject to U.S. laws and should be served with a QDRO. There's no guarantee that your ex- will get survivor benefits if no QDRO is entered, I would expect that she would not qualify for such benefits absent a QDRO, and I further suspect you don't want her to be making a claim against your estate. When an employer is subject to U.S. laws, an ex-spouse can receive vested pension and survivor benefits based upon a QDRO. Often that will mean that a new spouse will not receive those benefits.

    If this truly is an all-overseas enterprise, somebody can explore the laws of whatever country is involved to find out how the company might be compelled to recognize a U.S. divorce judgment and how to obtain and serve that nation's equivalent of a QDRO.

    Another option would be to try to negotiate with your ex- to purchase a life insurance policy, payable to her, to substitute for your survivor benefits if you predecease her. Your current spouse could be an alternate beneficiary in the event that your ex- predeceases you.
  • 08-23-2010, 04:53 AM
    usmprez
    Re: Overseas Pension Plan Will Not Recognize U.S. Divorce Judgment
    Mr. Knowitall:

    The company intends to pay me monthly from the overseas country via a wire transfer directly into my US bank account.

    In the original divorce judgment (without this pension) my ex-wife was actually awarded over 50% of the marital estate. Surely any attempt to revisit or change that judgment now would also allow me to claim that I agreed to the terms based on the language as written, and if the pension plan won't honor those terms it's not my fault, and should have been discovered by the attorneys before the judgment was signed.

    I have to be honest and say that unless I am missing something, it seems that there is no reason for me to do anything. I don't see that having a QDRO issued now is of any benefit to me, and of course I want my current wife to receive as many benefits as she can. If my ex-wife wants to pursue the company and attempt to compel them to recognize US law and accept a QDRO that is up to her, and I don't feel I have to participate.

    I thought this was over with long ago and I certainly do not want to pay anything else on her behalf, e.g. a life insurance policy.

    thanks for your time and info
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