In Virginia Retirement Systems v. Shelton, the husband was court ordered to designate his wife as a survivor beneficiary on his Virginia Retirement System retirement plan after their divorce, although he did not. The Virginia Retirement System (VRS) received a copy of the court order containing this information but was not under an obligation to conform to this court order on its own – it was the husband’s responsibility to ensure his retirement plan through the VRS complied with the court order. The VRS was only under an obligation to notify the relevant parties of a violation of the court order when appropriate.
After the husband’s death, the VRS benefits to the wife stopped. When the wife inquired with the VRS as to why the benefits stopped, the VRS properly fulfilled their obligation to notify her of the situation. Virginia courts do not have the power to order the VRS to designate a member’s former spouse as the beneficiary of a survivor benefit, and therefore the wife was left with no recourse to receive the benefits she would otherwise be completely entitled to.
It is very important to receive written confirmation that survivorship beneficiaries have been properly given to a spouse, especially when it has been court ordered. In Shelton, the husband did not have the correct retirement account designation assigned to his wife, even though he was under a court order to do just that. Despite the court order requiring the benefits for the wife, the court does not have authority to order a retirement benefits system itself change the survivorship beneficiary status of an account, even if the account owner has passed away after not following a previous court order. This case shows the importance of obtaining proof that your survivorship benefits for federal or state pensions were properly secured at the time of retirement – in accordance with any and all court orders before it is too late.
The attorneys at Smith Strong, if authorized by clients, will use multiple due-diligence strategies to ensure court orders are being followed and our clients’ interests are protected, even after their court proceedings are over. If you would like assistance properly securing the benefits you are entitled to, please call one of our offices at 804-325-1245 (Richmond) or 757-941-4298 (Williamsburg) to discuss your options.
Special Thanks to Brayden Meadows for his assistance with this article.