Pensions, Divorce and Offset Strategies
Key Points
The present value or cash out makes it easy to use the pension during settlement negotiations. This regime awards the non-employee spouse a lump sum settlement - or a marital asset of equal value - at the time of the divorce in return for the employee's keeping the pension. However, the non-employee spouse must know the present value of the pension to make this work to her advantage. The present value of a defined benefit pension cannot be ascertained by the projected monthly benefit. Trading away a pension plan requires careful thought of both short-term and long-term considerations. For example, even if a pension is divided 50/50, the division may produce what are termed "disparate results" because the ages of the payee, the worker spouse, and the alternate payee, the nonworker spouse, are different (and often the latter is significant younger than the former). When both spouses have pensions, each has latitude to use them for the horse-trading that happens in divorce negotiations. Just as Susan has a claim against Sam's pension at ABC Co., so Sam has a claim against her pension at XYZ Inc. Rather than dividing Sam's ABC pension and Susan's XYZ pension, he and she may decide to tradeoff another asset, for example, a portion of Sam's share of the marital home.
Suggested Reading
Resources & Tools
GOOD LEGAL ADIVCE -- The division and distribution of pensions often becomes very complicated, and these issues probably generate more appeals and reversals on appeal than any other issue in equitable distribution. Woman must learn how to ask the right questions when facing the distribution of pensions and retirement plans.
|
Easily Connect With a Lawyer or Mediator
Have Divorce Professionals from Your Area Contact You!
Online QDRO Preparation![]() QdroDeskTM. provides family law attorneys, their clients, and pro se filers an instant, easy, accurate, and affordable way to prepare Qualified Domestic Relations Orders (QDROs), the appropriate settlement agreement language, and processing instructions. And does it all online, with an easy to use, question-and-answer format that has made QdroDeskTM. an industry leader. Terms to Learn
![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() Over 1000 terms A-Z
|
View Property & Financial Resources in Our Online Bookstore
Terms & Conditions | Privacy | Cookie Policy | Do Not Sell My Information
Established in 1996
Copyright© 1996-. All rights reserved by MH Sub I, LLC dba 3StepDivorce.