Divorce proceedings can be a tough time in life. There's the matter of dividing up property and other assets. Some of this dividing up involves not just current assets, but also assets that will come into play in the future. Public pensions are one such asset. With this in mind it can be of great help to have a family law paralegal in Foley, AL, to guide you. We at Coumanis& York, P.C. would like to offer you some information on this topic to help things go just a little smoother with your divorce. Take a look at some facts about awarding pensions in a divorce.
When Couples Divorce
Property must be divided. This can be done by the spouses or they can allow the court to decide how property should be divided. Pensions are considered marital property and as such are subject to division. When courts decide how to divide property, they may not necessarily divide it equally. A spouse's separate property, such as that which was acquired before that marriage or given as a gift or inheritance, can't be considered for division unless the other spouse can prove that it was regularly used in the marriage.
10-Year Rule for Pensions
Couples are required to have been married for at least 10 years in order for pension benefits to be considered for division in the divorce. This time must have been during the period when the benefits were accumulated. Benefits accrued before the marriage cannot be considered for division. These benefits are considered to be separate property.
The Pension Percentage or Equivalent Value
If spouses meet requirements, courts can award up to 50 percent of any retirement benefits earned during the marriage. With pension awards, the actual pension, or portion thereof, does not have to be awarded. A judge can award other marital property that has the same value as that amount that would have been awarded from the pension.
Pension Disbursements
A spouse who is awarded a portion of the earning spouse's pension can either withdraw their share after the divorce is final or use a qualified domestic relations order (QDRO). In the second case, the receiving spouse waits until the pension vests before withdrawing their share. This is a good option because withdrawing early can lead to penalties and heavy taxes.
Property must be divided. This can be done by the spouses or they can allow the court to decide how property should be divided. Pensions are considered marital property and as such are subject to division. When courts decide how to divide property, they may not necessarily divide it equally. A spouse's separate property, such as that which was acquired before that marriage or given as a gift or inheritance, can't be considered for division unless the other spouse can prove that it was regularly used in the marriage.
10-Year Rule for Pensions
Couples are required to have been married for at least 10 years in order for pension benefits to be considered for division in the divorce. This time must have been during the period when the benefits were accumulated. Benefits accrued before the marriage cannot be considered for division. These benefits are considered to be separate property.
The Pension Percentage or Equivalent Value
If spouses meet requirements, courts can award up to 50 percent of any retirement benefits earned during the marriage. With pension awards, the actual pension, or portion thereof, does not have to be awarded. A judge can award other marital property that has the same value as that amount that would have been awarded from the pension.
Pension Disbursements
A spouse who is awarded a portion of the earning spouse's pension can either withdraw their share after the divorce is final or use a qualified domestic relations order (QDRO). In the second case, the receiving spouse waits until the pension vests before withdrawing their share. This is a good option because withdrawing early can lead to penalties and heavy taxes.
Trading Spousal Pension Rights
At least twice as many men as women have retirement benefits and they generally tend to be larger, so women can trade pension rights for other assets. This offset method can be more desirable than a QDRO or a share of the pension. With this option, short-term and long-term considerations will need to be given some thought because the relative ages of the worker spouse and the payee can produce disparate results, even if the pension is split 50/50. If both spouses have pensions, each can use them during divorce negotiations.
Find yourself a good family divorce lawyer in Foley, AL, and use this formation in helping ensure things go smoothly for your divorce. Be prepared with this information and with expert legal representation so that your rights are protected and divorce outcomes end up in your favor.
At least twice as many men as women have retirement benefits and they generally tend to be larger, so women can trade pension rights for other assets. This offset method can be more desirable than a QDRO or a share of the pension. With this option, short-term and long-term considerations will need to be given some thought because the relative ages of the worker spouse and the payee can produce disparate results, even if the pension is split 50/50. If both spouses have pensions, each can use them during divorce negotiations.
Find yourself a good family divorce lawyer in Foley, AL, and use this formation in helping ensure things go smoothly for your divorce. Be prepared with this information and with expert legal representation so that your rights are protected and divorce outcomes end up in your favor.
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