Focusing On Family Law – And You
Property division in a divorce can be complex, and you might be handling it while still processing the emotions involved with your divorce, making things more complicated.
The financial ramifications of a divorce can be major, significantly affecting your overall financial condition. This is especially true if you have a valuable asset, such as a pension, which you want to protect.
How California law treats a pension
Your pension is a marital asset, which means it is subject to division in a divorce. California is a community-property state. Community property is all property acquired during your marriage.
Community property must be split evenly. If you had your pension before you got married, your spouse is only entitled to half of the increase in value during your marriage, not half of the overall sum at divorce.
Scrutinize the terms of your pension plan
One of the most important things to do is review the terms of your pension plan carefully. Experienced attorneys and financial planners can assist with this.
Two important things to examine are if your pension has a survivor’s benefit and how payments are made. If you have a survivor’s benefit, your spouse may retain that benefit in lieu of any pension distributions.
Your pension may be a defined benefit pension plan. This means you have a choice to obtain one lump-sum payment or receive monthly annuity payments.
Annuity payments are made pursuant to a single-life payout or a joint-life payout. A joint-life payout allows them to keep receiving the annuity payments after your death, while the payments stop at your death with a single-life payout.
Get creative with your property division
If you want to protect your pension at all costs, consider offering your spouse additional assets, or a higher amount of another asset, in exchange for you keeping your pension.
For example, if you are selling the marital residence, you could propose that your spouse receive all proceeds from the sale in exchange for you keeping your pension. You are not required to divide all marital assets if the overall property division is even.
Make smart choices and explore all of your options. This increases your chances of getting through your divorce with your finances still intact.
