It’s crucial, when dividing assets during a divorce, that you don’t overlook any of the assets that you own. One reason that people sometimes leave things on the table is just that they don’t know the assets exist or they don’t know they have a right to them.
One example of this is if your spouse has a retirement plan. This could be a pension plan, or, more commonly, retirement plan. Either way, this is sponsored through your spouse’s employer, and they will eventually get the payments when they decide to retire.
These may be future payments
One reason that people overlook these payments is because they may be coming far in the future. If you’re getting divorced in your 30s, you’re not expecting to retire for decades and neither is your spouse. You may forget that you could still be entitled to some of the plan that your spouse has already earned.
The plan is a marital asset
The next thing to remember is that this pension plan can count as a marital asset. Just because it is in your spouse’s name and sponsored through their employer doesn’t mean that it is theirs alone. They have earned that pension while the two of you were married, just like they earned their other compensation, and so it counts as a marital asset.
You may not get the full total
Finally, remember that you likely only have a right to the portion of the plan your spouse earned during the marriage. You do not have a right to portions of the plan that are earned in the future or those that were earned before you got married, if your spouse was already employed there. So, even if you are given 50% of the shared asset during property division, remember that this may not be 50% of the total asset when that pension finally does pay out.
You can use a qualified domestic relations order (QDRO) to set up these payments. This process is very important with so much money on the line, so always be sure you know what steps to take.