What are the most common retirement drafting errors in settlement agreements?

The article identifies recurring errors: an undefined reference to the marital share, so a plan administrator cannot tell what number to act on; a time-rule or coverture formula applied to the wrong plan type, such as using a pension formula on a defined contribution account; and language that is silent on gains and losses, loans, or survivor coverage. Each of these reads fine in the agreement and then fails at plan review.

Where was this article published?

It was published in the NYSBA Family Law Review, the publication of the New York State Bar Association Family Law Section, in August 2023. The full article is held by the publisher. TOVA can send attorneys a copy on request.

Why does poorly drafted language create malpractice exposure?

Language that a court has to interpret or that a plan administrator rejects can delay a transfer for months or years, change what a client receives, or require the parties to return to court. When the loss traces back to wording in an agreement the attorney drafted, the exposure follows. The article frames clean retirement language as risk management, not just precision.

How do you avoid these errors?

Define the marital share so it is a number a plan can administer, match the formula to the plan type, and address gains and losses, loans, and survivor coverage before the agreement is signed. A retirement language review before signature catches these while they are still free to fix. After signature, the order has to be drafted to live with whatever the agreement says.

Published Work · NYSBA Family Law Review, 2023

Poorly Drafted Settlement Language Keeps Courts Busy

An article by Denisa Tova-Liebman on the retirement division drafting errors that send orders back, keep courts busy, and put practitioners on the edge of malpractice.

By Denisa Tova-Liebman, MBA, CFP, CDFA, CQS

Most retirement language in settlement agreements reads fine on the page and fails at the plan. The error is rarely a typo. It is an undefined marital share, a formula matched to the wrong plan type, or silence on the terms a plan administrator needs to act. This article identifies the recurring mistakes and the exposure they create.

What the article covers

The article catalogs the retirement division drafting errors that show up again and again in settlement agreements, and the consequences when they reach a court or a plan administrator. It includes specific examples of language that courts have struggled to interpret and that plans have rejected outright.

The throughline is that the problem is almost never visible at signing. The agreement is executed, everyone moves on, and the language only fails later when the order is drafted and submitted. By then the fix is no longer free.

Key takeaways

An undefined "marital share" is the most common error. If the agreement does not define the share as something a plan can administer, the order stalls until the parties agree on what they already thought they had agreed on.
A time-rule or coverture formula applied to the wrong plan type is a frequent failure. Coverture belongs to defined benefit pensions; applying it to a defined contribution account produces a number the plan cannot use.
Silence on gains and losses, loans, and survivor coverage leaves the plan to apply defaults the parties never chose.
Clean retirement language is risk management. The exposure for poorly drafted language follows the attorney who drafted it.

Why it matters for your settlement

The errors in this article are the same patterns that show up later as rejected orders. The cheapest place to catch them is before the agreement is signed. For the language itself, see the settlement language review guide; for what happens when an order is sent back, see the QDRO rejection guide.

What TOVA does not do

We flag retirement language issues and draft orders the plan can administer.

Citation. Tova-Liebman, Denisa. "Poorly Drafted Language in Settlement Agreements Keep Courts Busy and Practitioners on the Edge of Malpractice." NYSBA Family Law Review, August 2023. Full text held by the publisher. TOVA can send a copy on request.

More of Denisa's published work, the Settlements Done Right newsletter, and attorney references are on the resources page.

Want to read the full article?

Request a copy and we will send it to you. Free to attorneys, free to keep.

Request a Copy

Or email sedelman@tovaretirement.com

By Denisa Tova-Liebman, MBA, CFP, CDFA, CQS