Timing of Funding Is Critical When Determining if Pension Credits are Marital Property
- posted: Jan. 19, 2026
A key principle of New York’s Domestic Relations Law is that unless a contrary legal agreement exists, most assets accumulated by either spouse during the course of a marriage are divided among them when they divorce. This includes pension credits and proceeds of funds directed toward retirement accounts. In some situations, tracing the date when a particular asset was acquired can be more complicated than you expect.
The New York Court of Appeals in 2024 delivered a decision in Szypula v. Szypula, a case where divorcing parties disagreed over whether the husband’s Foreign Service pension credits should be considered marital property. John Szypula served in the Navy for 11 years. During the last two, he was wed to his wife, Meredith. Many years after leaving the service, John joined the U.S. Foreign Service, which has a pension system that offers a benefit to military veterans.
Under that provision, John Szypula was allowed to purchase Foreign Service Pension System credits for a period equivalent to the amount of time he served in the Navy. Payments for these benefits were taken from John’s paycheck while he and Meredith were wed. When the couple divorced, Meredith claimed that she was entitled to half of the pension credits based on New York’s equitable distribution laws. Conversely, John contended that she should only receive a small fraction of the pension assets because the Naval service that enabled him to obtain them occurred mostly while he was single.
In their decision, the judges held that the pension credits were subject to equitable distribution, because they were obtained using marital funds. Moreover, the ruling cites the state’s general legal principle that the definition of martial property should be interpreted broadly, while separate assets must strictly fit the stated criteria. Accordingly, the Court focused on the practical reality that payments, not the premarital service itself, created the acquired economic interest.
Prospective spouses who expect to purchase pension credits or perform other transactions tied to premarital service and want to maintain separate property status should consider negotiating a prenuptial agreement and segregating funds throughout the marriage.
Martin J. Rosen, P.C. in White Plains handles complex issues relating to New York marital property division throughout Westchester, Rockland, Putnam, Orange and Dutchess counties. Over more than five decades of legal experience, Mr. Rosen has achieved numerous professional accomplishments that reflect his commitment to providing exceptional legal representation.
He was the confidential law secretary to the Honorable Morrie Slifkin, Supreme Court Justice of Westchester County, and was named Chairperson of the Westchester County Bar Association’s Family Law section. In addition to his numerous articles, classes and lectures on domestic relations law, Mr. Rosen is a fellow of the American Academy of Matrimonial Lawyers. Our firm draws on this background to provide clear, effective counsel to individuals on complex family law issues. Please call 914-895-5430 or contact the firm online for a consultation.
Timing of Funding Is Critical When Determining if Pension Credits are Marital Property
- posted: Jan. 19, 2026
A key principle of New York’s Domestic Relations Law is that unless a contrary legal agreement exists, most assets accumulated by either spouse during the course of a marriage are divided among them when they divorce. This includes pension credits and proceeds of funds directed toward retirement accounts. In some situations, tracing the date when a particular asset was acquired can be more complicated than you expect.
The New York Court of Appeals in 2024 delivered a decision in Szypula v. Szypula, a case where divorcing parties disagreed over whether the husband’s Foreign Service pension credits should be considered marital property. John Szypula served in the Navy for 11 years. During the last two, he was wed to his wife, Meredith. Many years after leaving the service, John joined the U.S. Foreign Service, which has a pension system that offers a benefit to military veterans.
Under that provision, John Szypula was allowed to purchase Foreign Service Pension System credits for a period equivalent to the amount of time he served in the Navy. Payments for these benefits were taken from John’s paycheck while he and Meredith were wed. When the couple divorced, Meredith claimed that she was entitled to half of the pension credits based on New York’s equitable distribution laws. Conversely, John contended that she should only receive a small fraction of the pension assets because the Naval service that enabled him to obtain them occurred mostly while he was single.
In their decision, the judges held that the pension credits were subject to equitable distribution, because they were obtained using marital funds. Moreover, the ruling cites the state’s general legal principle that the definition of martial property should be interpreted broadly, while separate assets must strictly fit the stated criteria. Accordingly, the Court focused on the practical reality that payments, not the premarital service itself, created the acquired economic interest.
Prospective spouses who expect to purchase pension credits or perform other transactions tied to premarital service and want to maintain separate property status should consider negotiating a prenuptial agreement and segregating funds throughout the marriage.
Martin J. Rosen, P.C. in White Plains handles complex issues relating to New York marital property division throughout Westchester, Rockland, Putnam, Orange and Dutchess counties. Over more than five decades of legal experience, Mr. Rosen has achieved numerous professional accomplishments that reflect his commitment to providing exceptional legal representation.
He was the confidential law secretary to the Honorable Morrie Slifkin, Supreme Court Justice of Westchester County, and was named Chairperson of the Westchester County Bar Association’s Family Law section. In addition to his numerous articles, classes and lectures on domestic relations law, Mr. Rosen is a fellow of the American Academy of Matrimonial Lawyers. Our firm draws on this background to provide clear, effective counsel to individuals on complex family law issues. Please call 914-895-5430 or contact the firm online for a consultation.
