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Retirement plans and divorce

If you live in a community property state such as California, divorcing generally means that each spouse gets half of the property and half of the debts. While there are several ways to work out a fair and equitable division of property, judges are not likely to approve any agreement that appears to violate the 50/50 rule. When you sit down to figure out your property division, it is important not to forget about any pension plans that either of you have. Pension plans can also be considered marital property and may need to be divided. Keep in mind, however, that a pension plan differs from regular property in several significant ways and may be subject to specific laws.

Additional formalities

The first issue to be aware of is that you will need to fill out additional paperwork. Including your wishes for pension plan division in your agreement will not be enough. You need a separate form for your pension benefits that you will then attach to the agreement you submit for the court's approval. The judge will then issue a qualified domestic relations order, which will set forth the manner of the division. In addition to the judge's approval, the QDRO will also need approval from the benefits provider in order to be effective. There are many complex details involved in preparing a QDRO properly, so many people prefer to involve an attorney for at least this phase of their divorce.

Special legal status

Depending on the circumstances, you may actually need to add the pension plan as a third party in your divorce case in order to get a ruling on its division. Whether you need to do this can depend on several factors, including the type of plan you have and who provides benefits on it. Another potentially complicated factor is that many pension plans are governed by federal law, which affects the ways in which it can be divided.


In many cases, division will be based on a 50/50 divide of the amount that was accrued during the marriage. For example, if the spouse began earning benefits five years before marriage, continued earning them for the 15-year duration of the marriage and continued to earn for 12 more years, the division will affect the portion of the benefits accrued during the 15 years that the employee was married.

Dividing a pension plan can be a highly complex matter. You may even need to get opinions from expert professionals such as actuaries. To learn more about your best course of action, consult a knowledgeable attorney in your area.

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