Pensions
When a couple divorces, they probably focus first on dividing the property that's easy to see--the home, furniture, cars, etc. The property they can't see--their intangible property--is also affected by divorce.
For many families, a pension is the largest asset, after the family home. Even if the pension is earned solely by the efforts of one spouse, the portion of it that was earned during the marriage is still marital property subject to division by the court.
Many courts prefer to give full rights to a pension to the party who earned it as long as the other party will have a sufficient amount of income and property from other sources.
If, however, the pension is the primary source of income that a spouse would have and there are no other significant sources of income, the court is likely to divide rights to the pension. The court can divide the pension between the spouses by percentages (i.e., spouse A will receive 60 percent, spouse B 40 percent) or by a fixed cash amount to one spouse with the remainder to the other spouse (i.e., spouse A will get $600 per month, spouse B $400).
Congress has passed a law facilitating division of pensions. The law allows entry of orders by a court called Qualified Domestic Relations Orders (QDROs). These orders, when properly entered by a court, require the administrator of a pension plan to send pension checks not only to the worker, but also to the worker's former spouse. The court cannot order a pension check to be written before the worker is entitled to the pension, nor can the court change the total amount of the pension that is due. But the court can direct that when a worker is eligible for a pension (even if he or she has not yet retired and is not drawing a pension), checks must be sent to the worker's former spouse.
For example, if a couple is divorcing after a worker has retired, the court may order that pension payments be divided fifty-fifty (or by some other percentage). If the couple divorces while the worker is still employed and accumulating retirement benefits, the court may ascertain the value of the pension as of the date of the divorce and order division of that sum. When the worker later becomes eligible for payment of retirement benefits, the spouse could receive pension payments for a portion of the pension earned during the marriage. The worker would receive the remainder of the pension, including all of the pension that accumulated after the divorce.
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Guide to Family Law
Copyright © 1996, 2000 American Bar Association
