Many couples who divorce describe it as a jarring experience because of the impact it has on their finances. This is especially the case for late-in-life divorces.
If you’re nearing retirement age and you’re wondering if your ex can stake a claim to your pension, then you may find it disappointing to learn that they might be able to do so. Learning more about what may happen can help you strategize your exit from the marriage.
Can your spouse stake a claim to your pension?
Spouses who have put in the years building their retirement nest egg often ask one question when they first meet with their divorce attorney. They want to know what becomes of their pension once they divorce.
Virtually every state’s laws view any income that you generate during your marriage as a marital asset. If you deposited funds into a 401(k) or an individual retirement account (IRA) before you married, that money may be considered your sole property and, thus, not subject to division.
If you’re worried that a judge may split your pension down the middle if it is marital property, then don’t fret. The court will likely inquire about how you funded your pension before rendering any decision about how it is to be divided. Different rules may apply to military or government pensions.
Generally speaking, your spouse will be due only a fair portion of the pension. That may be higher or lower than you expect, depending on the length of your marriage, when the funds were contributed, your spouse’s own assets and more.
Protecting your pension in your divorce
You’ll want to familiarize yourself with the Employee Retirement Security Act of 1974 (ERISA) and Retirement Equity Act of 1984 before you agree to anything. Both of these federal laws afford you some pension protection.
Reviewing other resources about property division can help you learn more and be better prepared for the future to come.