When it comes to dividing assets in a divorce, few items can be as complex and potentially confusing as an individual pension. Like with most assets in a divorce, from houses to checking accounts, a judge weighs state law against a spouse’s pension and rule accordingly. However, unlike most assets, pensions must meet a number of federal guidelines and additional conditions before the division can be satisfied. If you are currently involved in divorce proceedings, consider some of the following points in regards to your retirement. Understand Fresno Divorce and Pension in this article.
Before, During, and After
As with most things in life, timing is everything. In regards to your pension, there are two distinct terms that apply across the board in any divorce: separate and community property. Separate property refers to those items, including your pension, that were secured before and after your marriage. Community on the other hand refers to any purchases or investments made during the marriage. For instance, if you live in California and your pension covers a 20-year span, of which 10 were spent in marriage, your spouse would be entitled to exactly one decade’s worth of your retirement. In other words, your spouse would not be excluded from the pension entirely – only the years before and after your marriage.
Devil in the Details
Of course, it is entirely possible for either spouse to waive off their right to the community pension. In many cases, divorcing couples will retain their individual pensions and refuse to collect from their ex. The reasons for this can be numerous, but it often pertains to the sheer complexity of the division itself. Splitting one’s pension through divorce was made especially tricky in 1974 with the introduction of the Employee Retirement Income Security Act. Simply put, this act created the architecture in which a split pension could be appropriately taxed. Additionally, when an individual’s pension is through the military, there are a host of other stipulations that come into play under the Uniformed Services Former Spouses Act.
In each situation, there is a great deal of legal nuance that must be accounted for by your legal team. Be sure to retain a dedicated family law firm that has a thorough understanding of the financial possibilities present in your divorce, before finalizing any division. For more information on pensions, retirement and divorce, contact the Law Office of Rick D. Banks today.