Divorce:

Pensions

Divorce does not just affect tangible property; it also affects the intangibles, such as a pension, which is often the second largest asset of a family (after the home).  The pension is affected by the divorce, even if it was earned only by one spouse, provided it was earned during the marriage. 

That said, most courts tend to give the full rights to the pension to the spouse who earned it, provided the other spouse has sufficient income from other sources.  But, if the pension is the primary source of income the other spouse would have, then the rights to it will probably be divided.  This may be done by percentage or by a fixed cash amount. 

It should be noted that Congress has passed a law facilitating division of pensions; it allows entry of orders by a court called Qualified Domestic Relations Orders (QDROs). When properly entered by a court, QDROs 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, however, order that pension check be written before the worker is entitled to the pension, nor can the court alter the amount of the pension that is due. What the court can do is order that when a worker is eligible for a pension (even if he or she has not yet retired and is not drawing a pension), the checks be sent to the worker's former spouse.

In the event that a couple divorces while the worker is still employed and accruing retirement benefits, the court may determine the value of the pension as of the date of the divorce and order division of that sum. Thus, when the worker does become eligible for payment of retirement benefits, the spouse would receive pension payments for the portion of the pension earned during the marriage. The remainder of the pension, including all of the pension that accumulated after the divorce, would go to the worker.

QDROs can be applied to pensions of nearly all private employers. Military or governmental pensions likely involve different orders with different forms, though in most cases, the result will be the same: with a properly entered order by a court, the pension can be divided between the spouses.

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