Dividing Pensions in a New York Divorce
Your Spouse’s Pension May Be Your Most Valuable Asset
For many divorcees, the so-called “golden years” of retirement can become a long journey across the rocky terrain of financial hardship. Career homemakers who divorce later on in life may find themselves facing vastly reduced circumstances in the wake of a marital breakup. For many middle-aged spouses, it is not unreasonable to fear that a divorce will leave them in financial ruin for the rest of their lives (See Lois Brenner’s Divorce book, “Getting your Share”).
In many of these cases, it is the woman who goes into her divorce on unequal footing and, therefore, must pay careful attention to the long-term consequences of how their marital property is divided. For example, many women will enter and leave the workforce due to the demands of child rearing. This may ultimately result in a lower contribution to their own pension plan – if they have one at all.
When a spouse contributes to their marriage as a homemaker or stay-at-home-parent, they may face a midlife divorce with little understanding that their spouse’s pensions may be their most valuable asset. In reality, the two largest assets that can be divided in a middle-class divorce are often the marital home and the husband’s pension. Many times, the pension is more valuable than the house they live in.
How Pensions Are Divided & Distributed in a Divorce
Many divorcing couples do not realize that pensions are considered marital assets and, thus, subject to equitable distribution. Many times, one spouse has accumulated pension benefits greater than the value of their home. While many people are aware of the possibility of dividing their house or its value, the importance of dividing a pension is not as well known– particularly since its actual distribution may be several years away.
In many cases, the division of a spouse’s pension will be one of the most complicated aspects of divorce. In fact, these issues tend to generate more appeals than any other issue in equitable distribution. For this reason, it is highly recommended that you speak with a knowledgeable divorce lawyer about pensions, 401(k)s, annuities and other deferred compensation options, including tax consequences.
Unlike bank accounts, stocks or bonds, the rights to a pension involve:
- Type and classification
- Valuation
- Distribution
- Qualified domestic relations orders
- Tax consequences
Discuss Your Options with Lois M. Brenner, Esq. Today
If have questions about pension plans and retirement assets, including how they can be divided and distributed in a New York divorce, please contact our team at Lois M. Brenner, Esq. We’re ready to put our experience to work for you.
Contact our office at (646) 663-4546 to schedule your initial consultation with Lois Brenner.
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