It’s hard not to judge certain situations that you read about, even if you don’t know all the facts of a case.

Take the case of Maurice and Cecilia, who were married back in 1993 when Maurice retired and began taking his pension benefit. Naturally, his wife was the beneficiary of his qualified joint and survivor annuity.

That means that when Maurice kicks the bucket, Cecilia will get some sort of pension benefit, maybe 50 percent or more of whatever Maurice gets each month.

The laws are pretty clear about spousal rights. When it comes to pension plans, generally the spouse of the plan participant has the right to any retirement benefits.

This is also true of defined contribution plans like 401(k) plans. If someone wants to leave their 401(k) plan to a beneficiary other than a spouse, they have to get a notarized signature from the spouse agreeing to the arrangement.

Fast forward to 2007. Maurice and Cecilia get a divorce, and the divorce decree awards Maurice his pension benefits. The following year, Maurice tries to change the beneficiary of his pension to his new wife, Judith.

Are you seeing red? Poor Cecilia! She not only had to endure the hardship of a divorce, but also the possible loss of pension income because the oaf she’d been married to for umpteen years dumped her for a younger model!

OK, like I said, I don’t know all the facts of the case. It could be that Cecilia dumped Maurice for a boy toy. Or, of course, the decision to part may have been a mutual one.

Cecilia victorious

In any case, the pension plan’s board of trustees found in favor of Cecilia. So then Maurice took the matter to court. As if his new wife, who’s only put up with him for a couple of years, deserves to get a monthly income for life. Who knows? Maybe she’s only 25!

OK, so maybe she’s 80. Whatever.

So what did the U.S. District Court decide? It decided that the trustees had made the right decision, according to a news item on Plansponsor.com. The magistrate cited a Ninth U.S. Circuit Court of Appeals ruling that surviving spouse benefits cannot be reassigned to a subsequent spouse after the annuity start date.

Whew!  I can’t help but breathe a sigh of relief for poor Cecilia.

Would I have felt as strongly about the outcome if Cecilia had the pension and tried to pull a switcheroo on Maurice? I have to admit: I’d likely root for Cecilia regardless. Call it gender bias.

Bias not entirely unfounded

Women have a big disadvantage when it comes to retirement savings. Bankrate’s article “Why retirement is different for women” goes into all the gory details about why women are much more likely than men to live out their so-called golden years in poverty.

What could Cecilia have done to protect herself if, when facing divorce in 2007, her husband hadn’t begun collecting pension benefits yet?

She could have gotten a QDRO — a qualified domestic relations order — that would enable her to receive the portion of the benefits to which she’s entitled after divorce.

Certified Financial Planner Leslie Corcoran of Family First Financial Planning in Stuart, Fla., recommends that women undergoing divorce find a good lawyer as well as a financial planner who can help them see the big picture. “So many women automatically take the home and skip the retirement plan, which in the long run is typically the wrong decision,” she says.

Getting a QDRO is not a slam dunk deal, however. You have to get a competent attorney involved who’s successfully handled these cases before.

Corcoran says you must stay on top of the attorney about the QDRO. “Some attorneys simply get it in the divorce document that a QDRO will be done, but they never do the final work. … I would get it done ASAP once the divorce is finalized.”

Obviously, the best scenario is to remain happily married to avoid these unpleasant situations to begin with. But if that’s just not possible, know your options.

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