When you get divorced, you need to think about how the act of getting divorced is going to impact all your finances, including your pension. Pensions are an aspect that are often overlooked as couples start the divorce process.
Pensions Are Considered Property
First, you need to understand that any of the money that went into a pension while you were married is considered property that was earned during the marriage. Pensions are just another asset, just like stocks, your home, or your vehicle.
Generally, any pension benefits provided by a company are considered martial property. In addition, more modern forms of retirement benefits, such as 401(k) contributions, are also considered community property as well. This includes the interest, capital gains, and any dividends that are accumulated on those funds throughout your marriage.
If your spouse already had a pension or retirement account before getting married, the original funds in the account are generally off-limits. However, anything added while you were married would be considered marital property.
Have to Be Proactive About Splitting a Pension
As you go through the divorce process, you need to be proactive about splitting the property. You can't just assume that you are going to be given access to your spouse's pension.
To start with, you will need to gather evidence that shows all of each of your pensions. You will need to be able to provide documentation of everyone's pension.
From there, you need to make sure that the pension is divided during the divorce process. You have to ask to get some of the proceeds of the pension during the divorce process. This will grant you a payout from your spouse's pension when the pension reaches its maturity age. This doesn't mean you can withdraw money early from the pension, but when it is time for the pension to pay out, you will benefit from the proceeds.
The administrator of the pension plan will need to be notified that divorce proceedings are happening so that no payouts or withdrawals will be authorized during the divorce proceedings. After that, you will need to obtain a Qualified Domestic Relations Order that will be sent to the pension plan to ensure that you get the money you are entitled to when the pension starts to pay out.
Don't just assume you will get assess to your spouse's pension in the divorce. Work with a divorce lawyer who will help you actively pursue the pension benefits to which you are entitled.Share