Opinion ID: 2582379
Heading Depth: 3
Heading Rank: 2

Heading: Survivorship Benefits

Text: The trial court valued Cathleen's survivor benefits in Milton's retirement at $168,308 and placed that value on Cathleen's side of the property division worksheet. Cathleen maintains that Milton's election of survivorship benefits was irrevocable. Although the trial court did not directly address the question whether the election of survivorship benefits was irrevocable, it did note its understanding that Cathleen will receive half of Milton's retirement if Milton dies before Cathleen. Milton does not appear to have contested that fact at trial, and he points to no support on appeal for his contention that he can revoke his survivorship election. The trial court valued the survivorship benefit in order to balance the estate. The question Cathleen presents is whether it was error to assign any value to that survivorship benefit. In Tanghe v. Tanghe, [16] the husband had elected survivor benefits for his wife, and the pensions were separated using QDROs. [17] The husband argued that because the wife was expected to live longer than he, she would receive not only her remaining interest in the husband's retirement, but also an increase in her retirement, representing the portion that was being paid to the husband. [18] The husband argued that the court should have assigned values for both the wife's survivorship interest in the husband's pension and her reversionary interest in her own pension after the husband's death. [19] The question before us was thus whether the wife's survivorship interest in her husband's retirement should have been capitalized and credited to the wife, in addition to being included in the QDRO. [20] We held that the capitalization of the survivorship benefits would place all of the risk of outliving the husband on the wife. [21] While the differences in parties' ages and life expectancies made the risk that the husband would not benefit from his wife's retirement greater, this was the same risk the husband took during the marriage. [22] Therefore, we determined that the use of the QDROs to divide the retirement of the parties and their survivorship benefits was proper and that it was not error for the trial court to refuse to capitalize the survivor benefits the wife might receive under the QDRO. [23] In this case, however, there were no QDROs dividing the retirement accounts of the parties; instead, the parties were awarded their own retirement accounts. As the Tanghe court noted, QDROs do not require that the parties' retirement funds be valued. [24] Although Milton has no interest at all in Cathleen's retirement, unlike the situation in Tanghe, where both parties had an interest in the other party's retirement accounts, [25] Milton will receive less money for his retirement because of his election giving Cathleen survivor benefits in his retirement plan. On the other hand, awarding and valuing Cathleen's survivorship benefit and placing it in her column does place on Cathleen the entire risk that she will outlive Milton. Although Milton is twenty-one years older than Cathleen, she only receives the survivor benefit from his retirement if she does in fact outlive him. Because we conclude above that it was error not to value Cathleen's retirement account, this case must be remanded to the superior court, which will have to revisit the property division in order to rebalance the marital estate in light of this asset. In doing so, the court must devise an equitable way to treat the survivorship benefit because Milton's interest in his retirement has been reduced by the survivorship election. The trial court will have several options, which could include valuing Cathleen's survivorship in Milton's retirement interest and placing it on her side of the property division, or, as in Tanghe, ordering that Milton receive survivorship benefits in Cathleen's retirement and dividing both parties' retirement accounts using QDROs.