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Is a Thrift Savings Plan a marital asset during divorce?

On Behalf of | Dec 16, 2022 | Divorce

No marital separation is easy, but a military divorce can raise unique issues, such as deciding the state for filing or child custody for service members that transfer often.

A concern that arises in any divorce is asset division. Members of the armed forces have access to the Thrift Savings Plan for retirement and may have to consider how it factors into a settlement.

Property division in a Texas divorce

In Texas, all property and assets that either spouse acquires during a marriage are community property. This statute applies to military and civilian divorces. Courts usually view the property a person obtained before the marriage as separate and not subject to division. Military divorces differ slightly from civilian splits because certain federal laws, such as the Uniformed Services Former Spouses’ Protection Act, may affect how a state court divides a service member’s retirement benefits.

TSP and property division

The TSP functions similarly to a 401K. As an asset that may accrue during the marriage, a service member may have to divide a portion of the account in a divorce if the court mandates a Retirement Benefits Court Order.

If the court orders an RBCO, the TSP freezes the account. The account owner can make contributions, adjust investment choices and change contribution allocations. Still, the individual may not make withdrawals or take a loan from the account until paying out the award or coming to some other resolution. Payments on existing loans on the account are still mandatory.

The TSP and other military benefits add nuanced elements to a military divorce. Divorcing spouses have to consider all factors when coming to an equitable agreement during a split.