Is My Pension at Risk?
When many people think of dividing assets during divorce, they imagine splitting up bank account funds, personal possessions, and possibly the family home. While these kinds of assets do generally need to be divided and distributed upon divorce, the fate of some lesser known assets must also be addressed. Pensions, in particular, are an important asset that, like any other type of marital property, are divisible. To ensure that you receive your fair share of your spouse’s pension, please contact our dedicated property division legal team for advice.
Pensions as Divisible Property
As a joint asset, pensions are potentially divisible if a couple decides to get divorced. This might be concerning to older couples who dissolve their marriages and are relying on the pension assets to fund their retirement. However, division is not always automatic and in most cases, one spouse will need to formally request a share of the pension in order to receive it after the divorce is finalized.
There are also alternatives to splitting the pension in half that could help ensure that both parties are provided for financially. For instance, a pensioner could offer another asset to his or her spouse in lieu of the pension holdings, the right to which would then be waived. Alternatively, a pensioner could purchase a life insurance policy with a value that is the same as half of the pension and then list his or her spouse as a beneficiary. In the event of divorce, the non-pensioner would have full access to the life insurance policy, leaving the pension in the hands of the other party. Finally, if two spouses share pensions or retirement accounts that are of equal value, they could enter into a settlement agreement, in which each spouse waives the right to the other’s accounts.
If a couple is unable to come to an out-of-court agreement regarding the division of pensions or other marital assets, a court will step in and decide whether or not to award a portion of the account to the other spouse. However, before making a decision, courts will need to review information about the pension and will also need to issue a Qualified Domestic Relations Order (QDRO), which will be sent to the pension plan administrators and grants a person the right to a portion of their former spouse’s pension plan. This is an important step in the property division process, because federal law only allows benefits to be divided if a QDRO exists. This is true even if a couple’s official divorce decree provides for the division and distribution of the funds contained in a pension or retirement account, so it is critical for divorcing parties to speak with an attorney about the fate of their pension prior to the conclusion of the proceedings.
Call Today to Learn More About Dividing Your Pension
If you are concerned about the fate of your own pension upon divorce, please don’t hesitate to call Sandra Bonfiglio, P.A in Fort Lauderdale at 954-945-7591 or to send an online message requesting a free case evaluation.