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Do You Need a Lawyer That Can Help You Divide a TSP in a Divorce?

We are here to handle this for you.  Call today. 1-888-646-5808.

How to Divide a Thrift Savings Plan in Your Client’s Divorce Case

This process is much like dividing a 401K via QDRO in a divorce. No matter how many times you have processed a TSP division, you need to anticipate that there will be added time and necessary resources required to get a divorce finalized that involves a TSP.

TSP division divorce how to

Template Language for Dividing Thrift Savings Plan:

AWARD OF THRIFT SAVINGS PLAN

This Final Decree of Divorce is intended to meet the requirements for a “Qualifying Retirement Benefits Court Order” relating to the Thrift Savings plan (hereinafter sometimes referred to as “the Plan”). In compliance with the requirements for a Qualifying Retirement Benefits Court Order, the Court specifies, defines, orders and decrees as follows:

  1. The Participant in the Plan is JOHN SMITH whose address is XXXXX and whose Social Security Number ends in XXXX. The former spouse awarded the interest described below in the Thrift Savings Plan account of Participant is JANE DOE whose mailing address is XXXXXXX and whose Social Security Number ends in XXXX. As a part of a just and right division of the estate of the parties, IT IS ORDERED AND DECREED that JANE DOE is awarded 50% of the account balance (which shall NOT include the amount of any loan from the Plan) in JOHN SMITH’s account in the Thrift Savings Plan as of October __________ which amount shall be adjusted for its proportionate share of all interest, earnings or losses in the account from that date forward through the end of the month prior to the date of payment by the Thrift Savings Plan to JANE DOE. IT IS FURTHER ORDERED AND DECREED that payment of the amount awarded herein shall be made by the Thrift Savings Plan in a single payment to JANE DOE as soon as practicable after determination that this order constitutes a “Qualifying Retirement Benefits Court Order”, but payment shall not occur before the expiration of all parties’ appeal rights as described in 5 C.F.R. §1650.32. By way of example, if the total account balance was $5,000 and there was a loan of $2,500 the amount to be received by JANE DOE would be 50% $5000.
  2. IT IS FURTHER ORDERED AND DECREED that JANE DOE shall include in her gross income for the taxable years of receipt any and all taxable distributions to her of the amount specified above by the Thrift Savings Plan. JANE DOE shall be treated as the distributee under §§72 and 402 of the Internal Revenue Code of 1986, as amended, of any taxable distribution made to JANE DOE pursuant to this order.

While it is anticipated that the Thrift Savings Plan will pay directly to JANE DOE that benefit awarded to her herein, JOHN SMITH is designated a constructive trustee to the extent he receives any benefit under the Thrift Savings Plan due to JANE DOE under the terms of this Order but paid to JOHN SMITH.  JOHN SMITH is ORDERED AND DECREED to pay the benefit awarded above to JANE DOE directly to JANE DOE within three days after his/her receipt of such benefit

Click to Download Word Version So That You Also Have Formatting:

TSP TEMPLATE

COVER LETTER TEMPLATE TO DIVIDE TSP
January 10, 2016

RE: AWARD OF TSP in CAUSE NUMBER: _______ – Employee (Participant): JOHN SMITH, SSN: ____________ Participating Address:____________________; Alternate Payee: ___________________, SSN: _____________ Address:_________________.

Via Facsimile: 1-703-592-0151

To Whom it May Concern:

Following, please find the Certified Decree of Divorce, dividing JOHN SMITH’S TSP as per pages ______of this document. This decree is a final order of the Court, and which was executed on _________________. As per the language of this Thrift Savings Award Plan, JANE DOE is to be given ____% of the balance of the same as the date of the divorce: _________________. Please take all steps necessary to administer this order.

If you have any questions, please reach me directly at XXXXXXXXX

Regards,

_____________________Attorney for Participant

All of the Above TSP Division Documents Can Be Faxed to the Number Above.

After the divorce, do not forget that you must receive confirmation of acceptance before you can close this file as documents of this nature can get lost in the mix, and you want to make sure everything was transferred as planned.

Do You Need a Lawyer That Can Help You Divide a TSP in a Divorce?

We are here to handle this for you.  Call today. 1-888-646-5808.