For those who work for the federal government, the term Thrift Savings Plan (or TSP) is likely very familiar. The TSP acts as a retirement savings plan for all federal civilian employees and even some in the military. A TSP is what’s known as a defined contribution plan and functions similar to a 401(k) plan.
Those who either have a TSP of their own or are married to a spouse who works for the government might wonder how the retirement vehicles are handled during a divorce. It’s important to know from the start that a TSP is capable of division in a divorce. It can even be garnished to fulfill the holder’s past-due alimony or child support obligations.
The spouse of the person with a TSP can receive some general information about the retirement account, but not many critical details. Upon written request, the government will provide a spouse or a spouse’s attorney quest with the account balance, any loan balances and statements. However, the TSP administrator will not reveal personal identifying information connected with the account.
A TSP can be split by providing the administrator with a court order that complies with federal regulations. The TSP provides a sample of such an order that contains all the necessary language, a step that makes drafting the order easier. Once the administrator receives a valid order they will pay out the amount contained in the order to the designated party.
If you are married to someone with a TSP, it might be beneficial to have your attorney freeze the account with a court order. Such a step will ensure that your spouse cannot withdraw money from the account or make any loans against its value, thus reducing your share of the TSP.
If, on the other hand, you are the party with the TSP, you need to take certain steps to protect yourself in the event of a divorce. For one thing, make sure to file a new designation of beneficiary with the TSP administrator to make sure that the beneficiary that you actually want to receive your money is the person on file. If you don’t make this change the TSP administrator will have no choice but to pay out the money to the beneficiary listed, even if that person is your former spouse. This is true even in cases where your spouse waived their interest in the TSP.
If you find yourself facing the prospect of divorce in Charlotte, contact experienced equitable distribution and property division lawyers who practice in Charlotte, North Carolina like those at Arnold & Smith, PLLC who can help guide you through the sometimes-confusing process.
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