Owen and Owens blog

Dividing Military Retirement Pay

name.nospam@nospam.example.com (Kimberly Skiba) — Sun, 25 Mar 2012 15:48:00 -1000

The retirement benefits of members of the military are also not divided using a QDRO because these benefits are not subject to ERISA. Instead, military retirement pay is divided using a Court Order, which will meet all the requirements of the relevant federal laws and regulations. Central to the division of military retirement pay is the Defense Finance and Accounting Service (“DFAS”), which is akin to the Plan Administrator for private defined contribution and defined benefit plans and to the Office of Personal Management for federal civilian retirement.

A minimum of twenty years of service is required for any member of the military to receive retired pay, unless the service member is forced to retire because of disability. Military retirement benefits are computed under one of three formulas which is keyed to the year the service member entered active duty; partial credit is given for service in the Reserves or National Guard. Only Disposable Retired Pay, which is the service member’s total monthly retirement pay less deductions for previous overpayments of retired pay, forfeitures ordered by a court martial, certain disability retirement payments, and the amount deducted to provide a Survivor Benefit Plan annuity for a spouse or former spouse pursuant to a Court Order, can be divided by a Virginia Court in the context of a divorce.

As with the retirement benefits of federal civilian employees, a portion of the service member’s Disposable Retired Pay cannot be paid to the former spouse until the service member actually retires. Additionally, any survivor benefits awarded to a former spouse will stop if the former spouse remarries prior to the age of fifty-five. (Though, if the former spouse’s marriage terminates by death, divorce, or annulment, the payments can be reinstated.) However, survivor benefit coverage must be elected by the service member on or before his retirement, even if they are required by Court Order. As a result, a domestic attorney representing the estranged spouse of service member (or former service member) must be mindful of the service member’s date of retirement.

Dividing Federal Civil Service Retirement Benefits

name.nospam@nospam.example.com (Kimberly Skiba) — Thu, 15 Mar 2012 13:01:00 -1000

The retirement benefits of federal civil servants are not divided using a Qualified Domestic Relations Order (“QDRO”) because these benefits are not subject to the Employee Retirement Income Security Act (“ERISA”). Instead, the retirement benefits of federal civil servants are divided using a Court Order referred to as a “Court Order Acceptable for Processing” (“COAP”), which will meet all the requirements of the relevant federal laws and regulations. Central to the division of federal civil service retirement benefits is the Office of Personnel Management (“OPM”), which is akin to the Plan Administrator for private defined contribution and defined benefit plans.

An employee of the Federal government (other than those who are military personnel, who are treated differently) will be covered either by the Civil Service Retirement System (“CSRS”) or the Federal Employees Retirement System (“FERS”) depending upon when he or she began working for the federal government. (Though, under certain circumstances, CSRS participants were able to switch to the FERS once it became available.) CSRS participants are enrolled in a defined benefit plan similar to the pension of a private company. However, they are not covered by Social Security and, before their retirement, they do not pay Social Security tax on their earnings. FERS participants, on the other hand, are covered by Social Security and do pay Social Security taxes on their earnings. In comparison to their CSRS counterparts, though, they receive a much smaller defined benefit upon retirement. But, FERS participants are enrolled in a 401(k)-like system called the Thrift Savings Plan (“TSP”).

When dividing the pension component of federal civil service retirement benefits in the context of a divorce, it is important to remember that there are three separate types of CSRS or FERS benefits subject to division: employee annuities, refunds of employee contributions, and former spouse survivor annuities. The participant’s TSP is also subject to division in a divorce. A well-versed domestic attorney will assist the client in negotiating a settlement that maximizes his or her potential eligibility for these components.

Smartphones, Your Privacy (or lack thereof), and the 4th Amendment

name.nospam@nospam.example.com (Amy Hensley) — Mon, 05 Mar 2012 13:56:00 -1000

It is difficult to imagine how the generations before us survived without the technology available today. I know books helped, but Google provides answers in seconds. Data, translations, email, directions, and the answers to even the most random questions are instantaneously delivered upon request. Now, with smartphones we carry these capabilities, as well as our private lives, with us everywhere that we go. Our texts, emails, internet search histories, Facebook messages, videos, photos, and GPS trackings reveal a lot about our day, movements, preferences, and thoughts. While we gain convenience with this technology, the information is also valuable to others for a number of reasons. For example, retailers already used our smartphones to track our whereabouts at the Short Pump mall. It is an efficient way to cheaply target marketing and learn our preferences without asking us. Luckily this experiment was shut down pretty quickly. Not only may smartphones impact businesses, but it is inevitable (at least in the foreseeable future) that they will have a huge impact on the criminal justice system and how law enforcement agencies gain private, perhaps incriminating information, about us.

The United States Supreme Court and the Virginia Supreme Court have yet to determine whether it is a violation of a person’s 4th Amendment rights for the police to search a person’s smartphone incident to arrest. Courts across the country have rendered split decisions on this very question. As a reminder, the 4th Amendment protects a person from unreasonable searches and seizures. So what does this mean?

It means that until the courts hold that our smartphones cannot be searched incident to arrest, our private lives may be available to be viewed and used against us, if appropriate. For example, under the current law, it is not clear that it would be impermissible for a police officer to search a person’s smartphone upon arresting her for trespass. Presumably, a person’s phone has nothing to do with trespass, and there is no obvious reason in most cases as to why an officer would have a reasonable articulable suspicion that the phone contains evidence of the crime of trespass. Today, however, a person’s smartphone might be searched under this very scenario. What about a DUI? Let’s say a person is pulled over for swerving, alcohol is smelled, and field tests are failed. The person is arrested, and his phone is searched on the drive to the jail for the breathalyzer test. Texts on the phone reveal that the person, who now sits silently in the back of the patrol car, told his friends not less than an hour ago that he was on his eighth beer. In this scenario, one might feel inclined to be grateful to the police for making sure this person, who undoubtedly is a hazard to public safety, is convicted. Law enforcement agencies, however, have other avenues for collecting evidence to convict this offender without violating his privacy rights. After all, remember that we did not have smartphones until a few years ago and people have been convicted of DUIs for decades.

So what should you do? Always be polite and cooperative to the police, but handing over your smartphone for a voluntary search is definitely one way to make sure that any evidence found on your phone can be used against you without a 4th Amendment violation challenge. In addition, put a password on your phone. It will be interesting to see how courts adapt to this ever-changing technology.

Dividing Defined Benefit Plans

name.nospam@nospam.example.com (Kimberly Skiba) — Wed, 29 Feb 2012 11:05:00 -1000

A defined benefit plan is an employer-sponsored retirement plan where employee benefits are determined pursuant to a formula which may involve factors such as salary history, duration of employment, or other criteria. Pensions are examples of defined benefit plans.

In the context of a divorce, the Court may award the non-participant spouse up to 50% of the “marital share” of the participant’s defined benefit plan by QDRO. The awarded portion of the marital share may take the form of a specified percentage of the account balance, or a fraction/percentage of the marital share defined as of a certain date. In addition, the non-participant spouse may be entitled to a portion of other economic improvements on the participant’s benefit, depending upon the features of the particular plan and what is ordered by the Court or agreed upon by the parties.

In the course of negotiating a settlement or preparing for trial, one issue to be considered is whether the non-participant spouse will take his or her share of the participant’s defined benefit plan as a shared interest or as a separate interest. Each of these options has benefits and disadvantages and must be considered carefully in the context of the particular defined benefit plan.

If a shared interest is selected, the payments to be received by the non-participant spouse will begin at the same time the participant begins receiving his or her benefit, and will be made to the non-participant spouse in the form elected by the participant. The payments to the non-participant spouse will also cease upon the death of the participant unless survivorship benefits are negotiated, because the duration of the benefit is keyed to the participant’s lifetime. This method for dividing a defined benefit plan is sometimes referred to as an “if, as, and when received” approach.

If a separate interest is selected, the payments to be received by the non-participant spouse may begin, within the parameters of the particular plan, when the non-participant spouse chooses, and will be made to the non-participant spouse in the form he or she elects (again, within the parameters of the particular plan). The payments to the non-participant spouse will not cease upon the death of the participant because the duration of the benefit is keyed on the non-participant spouse’s lifetime. Unfortunately, if the participant is already in pay status, this method for dividing the participant’s interest in the defined benefit plan is usually not available.

Second Chance Per Hernandez: Shifts Responsibility to Defendants

name.nospam@nospam.example.com (Amy Hensley) — Fri, 17 Feb 2012 08:46:00 -1000

The condensed story for Hernandez is that he was charged with feloniously assaulting a police officer in violation of Va. Code § 18.2-57(C). The lower court held that the court did not have the authority to defer disposition (even though such a result might be appropriate), as the defendant was not charged with a crime that had been specifically designated by the Virginia legislature as eligible for such deferment. Crimes that the courts have explicit statutory authority to defer disposition of include, but are not limited to, spousal rape (§ 18.2-61), first offender drug possession (§ 18.2-251), and first offender misdemeanor property offense (§ 19.2-303.2).

On January 13, 2011, the Virginia Supreme Court overruled the lower court in Hernandez v. Commonwealth, 281 Va. 222, 707 S.E.2d 273 (2011), holding that courts have inherent authority to defer disposition of a case after the evidence is presented and a plea is entered. The lower court may now withhold a finding of guilty for a period of time and require a defendant to complete certain requirements. Successful completion of the requirements results in a dismissed charge. This means something critical to defendants. Instead of a conviction, you may now get a second chance under Hernandez. Defendants should also take note that Hernandez squarely places the onus on them. So don’t blow it.

Because the Virginia Supreme Court did not provide specific instructions to the lower courts about how to implement Hernandez, requirements vary from jurisdiction to jurisdiction. For example, in Henrico, the courts will not consider a Hernandez plea unless the defendant has a clean record and pleads guilty. In addition, the Henrico courts’ status quo conditions include: 24 hours of community service, 6 hours in jail to be served immediately following trial, regular monitoring by the Community Corrections Program (“CCP”), and a requirement to be of good behavior and keep the peace for a designated period of time. The monitoring by CCP includes regular drug and alcohol testing, even if the charge is not drug or alcohol related. Testing may be administered the day of trial. A dirty drug test on a Hernandez plea in Henrico will result in a show cause, a conviction, and jail time. Hernandez gives defendants a second chance, but if they do not comply with the conditions, the penalties ordered by the court may be more severe than had the defendant pled guilty and been convicted on his trial date. The responsibility to meet the court ordered conditions falls on the shoulders of the defendant. While there is no promise that complying with the conditions set forth by the court will result in an absolute dismissal of the charge(s), I have yet to see a case in which the court did not dismiss the charge upon successful completion of the conditions.

Opponents presented legislation in January 2012 to gut Hernandez, as they did in January 2011. To date, the attack on Hernandez has not been successful. For those fearful opponents, the judiciary has been implementing Hernandez with great caution. As for the public at large, while CCP, I concede, may be overwhelmed at times with the influx of defendants in need of monitoring, the Commonwealth undoubtedly saves monies that would be required to fund jails in the short term. And in the long run, (I admit this point is a little disconcerting but realistic), Hernandez could have a major impact on sentencing guidelines for the once lucky defendant who is convicted of another charge in the future, thereby reducing his sentence and the monies required to jail him for a subsequent offense.

Dividing Defined Contribution Plans

name.nospam@nospam.example.com (Kimberly Skiba) — Sun, 05 Feb 2012 16:50:00 -1000

A defined contribution plan is an employer-sponsored retirement plan where the amount of the employer's annual contribution is specified and the employee can also elect to make contributions. 401(k) plans and profit-sharing plans are examples of defined contribution plans.

In the context of a divorce, the Court may award the non-participant spouse up to 50% of the “marital share” of the participant’s defined contribution plan by QDRO. The awarded portion of the marital share may take the form of a specified dollar amount, a specified percentage of the account balance, or a fraction/percentage of the marital share defined as of a certain date. In addition, the non-participant spouse may be entitled to a portion of other economic improvements on the participant’s benefit, depending upon the features of the particular plan and what is ordered by the Court or agreed upon by the parties.

In the course of negotiating a settlement or preparing for trial, one issue to be considered is whether the non-participant spouse will request interest, gains, and losses on his or her award. If the non-participant spouse is awarded or given interest, gains, and losses, his or her awarded portion will be increased (or reduced, as the case may be), depending upon the market, from the date of the award (usually the date of separation) to the date the Administrator of the Plan distributes the award to the non-participant (i.e., typically by establishing a separate account for the non-participant). If the non-participant spouse is not awarded or given interest, gains, and losses, he or she will only receive his or her awarded portion. Obviously, whether a non-participant chooses to ask for interest, gains, and losses will depend upon the then-current posture of the market, and may represent a gamble since there is often a substantial delay between when the Court makes its equitable distribution award (or the parties sign a Settlement Agreement) and the administration of the QDRO (and, therefore, the division of the retirement benefits).

Dividing Retirement Benefits in Divorce

name.nospam@nospam.example.com (Kimberly Skiba) — Tue, 31 Jan 2012 16:18:00 -1000

One category of assets that causes much confusion for clients in the context of dividing property and debts in a divorce action is retirement benefits. The term “retirement benefits” includes defined contribution plans such as 401(k) plans and profit sharing plans, as well as defined benefit plans such as pensions.

Section 20-107.3(G) of the Code of Virginia addresses how these benefits are to be divided: “Upon consideration of the factors set forth in subsection E, the court may direct payment of a percentage of the marital share of any pension, profit-sharing or deferred compensation plan or retirement benefits, whether vested or nonvested, which constitutes marital property and whether payable in a lump sum or over a period of time. The court may order direct payment of such percentage of the marital share by direct assignment to a party from the employer trustee, plan administrator or other holder of the benefits. However, the court shall only direct that payment be made as such benefits are payable. No such payment shall exceed 50 percent of the marital share of the cash benefits actually received by the party against whom such award is made. ‘Marital share’ means that portion of the total interest, the right to which was earned during the marriage and before the last separation of the parties, if at such time or thereafter at least one of the parties intended that the separation be permanent.”

But, not all retirement benefits are created equal. For instance, although most types of retirement benefits are divided using a court Order called a Qualified Domestic Relations Order (“QDRO”), the content of those QDROs differs for defined contribution plans and for defined benefit plans when the owner of the retirement benefit is (or was) an employee of a private company. On the other hand, the retirement benefits of federal employees are divided by a court Order called a Court Order Acceptable for Processing (“COAP”). The retirement benefits of military personnel (retired or active duty) are divided by a different type of Order. Over the course of the next few posts, I hope to shed some light on this very complicated area of divorce law.

New Year, New Relationship

name.nospam@nospam.example.com (Kimberly Skiba) — Sun, 15 Jan 2012 16:15:00 -1000

As a domestic attorney, I hear many different stories as to why individuals make their way to my office and, eventually, end up pursuing a divorce. From family to family, the details differ, but I have reached the conclusion that most divorcing people have experienced a disconnect with their spouse in at least one of four main areas (in no particular order): how to manage money, how to raise their children, how to interact with their respective extended families, and their intimate relationship. At this time of year, when many are thinking about how to improve during the new year, this seems to be an important observation. If more couples acknowledged that these four areas were potential areas of discord and made a conscious effort to be proactive with regard to them, I am almost certain that I would be out of a job.

I have to admit that, even after years of being a domestic attorney, it still surprises me when a potential client who has been married for a number of years tells me that he or she has a fundamentally different philosophy with regard to one of these issues than his or her spouse and that this is why they need to be divorced. For instance, a few days ago, during an initial consult, a female potential client told me that she could not stay married to her husband because he did not want any children and she very much did. During the consult, I wondered to myself: “Why didn’t you and your then-fiancé talk about this before you married?” It seems to me that, if she was determined to have children and her soon-to-be husband clearly did not want them, this difference of opinion would be a deal breaker. But, many either do not think, or chose not, to have these conversations in advance of getting married. And sometimes people do have these conversations before the wedding, realizing that there may be divergent opinions, but, for various reasons, still proceed with the wedding.

In the end, I think the message is clear: a successful couple will have these conversations before they marry and will make sure they are on the same page; then, they will continue to revisit these issues periodically throughout their marriage to stay that way. However, this is not to say that it is too late for those who are already married. If my years as a divorce attorney have taught me anything it is that open communication is the key to any relationship. I truly believe that many issues can be overcome if they are identified as issues early on, and if a couple then makes an honest commitment to work through them.

Advance Health Care Directive Registry

name.nospam@nospam.example.com (Kimberly Skiba) — Mon, 12 Dec 2011 11:49:00 -1000

At the completion of my document signing meetings for my estate planning clients, many have questions about what to do with their newly-executed documents. As a result, I spend a good amount of time at the conclusion of these meetings educating my clients about their estate planning “next steps.” Until recently, I always reminded these clients to provide a copy of their Advance Medical Directive (“AMD”) to the person they named as agent, as well as to their doctor. I also encouraged them to bring a copy of their AMD with them to any hospitals they checked into and to keep a copy in their carry-on bag when traveling. All of these reminders were necessary because, until recently, there was no centralized place for my clients to “store” their executed AMDs so that they were reasonably accessible to those who needed to see them.

In 2008, the Virginia General Assembly passed legislation to create a secure online central registry for advance health care directives. Over the course of the last four years, however, this registry seemed to be more of an aspiration than a reality. That was until December 7, 2011.

On December 7, 2011, the Virginia Department of Health launched its Advance Health Care Directive Registry (the “Registry”). A public-private partnership between the Commonwealth of Virginia, UNIVAL Inc., and Microsoft, the Registry will allow individuals to store their advance medical directives, health care powers of attorney, and organ donation information, among other things, securely online at no cost to the individual. From what I have read over the last few weeks, those who sign up for the registry will be provided with an identification card with their personal registry information, and will be able to share access to their information with anyone they designate.

The web address for the Registry is www.virginiaregistry.org. I intend to try to register my own AMD shortly and will report back in another blog post in the near future.

When Young People From Good Families Make Bad Choices

name.nospam@nospam.example.com (Joe Owen) — Mon, 12 Dec 2011 08:49:00 -1000

“I’ve been clean and sober for 8 years, my parents sent me to rehab after I graduated from high school, college, and law school. Don’t ever give up on your kids.” These were the words spoken to me by the prosecutor in the City of Richmond as we left the court room after my son’s criminal case for possession almost 10 years ago. My son has found his way and remained clean and sober since that time.

I often find myself working with families in the same situation our family found itself in December 2002. One of our babies was in jail with several criminal charges pending. What to do? How can we best help our child? It is one of a parent’s worst nightmares.

You have the full range of emotions, anger, fear, shame, guilt, blame. You go back and forth between wanted to kill them or give them a hug. Neither extreme is right or wrong. Both are real.

So how can this happen to a good family who has done everything they can to properly love and raise their children? If I had those answers I would have my own TV show and be the next Dr. Phil. What I do know without question is that our children will make bad choices. Before you say not mine, realize they already have made bad choices, you just don’t know it. The bad choices vary in degrees but all make them. Secondly know we are in the middle of an epidemic of substance abuse in our country. A recent study from Columbia University found that 60% of incoming college freshman nationally have some form of process addiction. This includes not only the usual suspects of drugs and alcohol, but also eating disorders, gambling and a multitude of other pain and stress management behaviors.

Playing the shame or blame game is not productive. I spend a lot of time in many consults counseling the parents on action steps which are productive and helpful in dealing with the family crisis resulting from the arrest. The approach will vary from a hug to a kick in the butt. Every criminal case, like every child, is different. The families need to strike a balance between only carrots or only sticks. Both are needed in proper amounts. We did not bond our son out of the Richmond City jail until he agreed to go to inpatient rehab. That was a very difficult choice but it was the right one. His experience in the Richmond City jail gave him the right motivation to do the hard work of rehabilitation.

Every parent wants to take full credit for the good things their children do. Taking full blame and having the shame and guilt for the poor choices is the other side of the same coin. Both are wrong. Granted the bundle of joy has your DNA but they also have free will to make choices. As a result parents should not take too much credit, nor likewise take too much blame.

I hope and pray no one reading this will experience the trauma of having your son or daughter make the kind of bad choice that lands them in jail with criminal charges. But if you do know that you are not unique. The majority of my criminal clients from Chesterfield, Henrico, Richmond or Powhatan are young people from good families who have made bad choices.