Petitioner's Brief on the Merits - Supreme Court of Texas

property interest at divorce (when the community estate ends) and the value of any
increases or decreases on the community property share, such as investment gains or
losses, cost of living increases, or, in the case of defined benefit plans, the timing of the
commencement of the benefit, 22 attributable to that community property share rather than to
the future separate property of the employee or the future community property interest of a
subsequent spouse. 23
The following chart sets out the four sequences, the property rights implicated, and
whether apportionment, valuation of the community property interest, or valuation of the
increases in each share must occur at the time of divorce for both defined contribution and
defined benefit plans to preserve those rights. The table states when valuation is something
other than what benefit plan statements indicate at divorce.
22 Since defined benefit plans are expressed in terms of the accrued benefits payable at normal retirement age, if a
plan participant or alternate payee takes the benefit before the normal retirement age, the benefit will be discounted to
present day value.
23 The valuation of earnings applies to pre-marriage separate property as well. For example, In re Joiner collapsed
the valuation of earnings and community property share. 755 S.W.2d 496 (Tex. App. – Amarillo 1988, no writ). In that
case the parties married after the plan participant began participation in a profit sharing stock plan, with 1/5 of the
time in the plan before marriage, and 4/5 during the marriage. The court found that exactly 80% of the plan was
community property. 755 S.W.2d at 498. However, given the extra time for growth on the original 20%, the separate
property in the plan would be more than 20%, as the increase in the value of the separate property is separate
property. See Smith, 22 S.W.3d 140.
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