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How Retirement Accounts and Pensions are Divided in a Divorce?

Posted by Unknown | Jun 16, 2021 | 0 Comments

how to divide retirement and pensions in divorce

Drama Free Divorce can provide the answers to all of your inquiries about how to divide retirement and pensions in divorce, with tailored financing solutions specifically for Kansas City residents in both Missouri and Kansas, offering monthly payments as low as $500.

Focusing on transparency, our pricing structure is set up so as to minimize unexpected surprises down the line. Drama-Free Separations is dedicated to keeping court appearances stress-free, our compassionate legal services recognize emotional struggles associated with separation. You can rely on us every step of the way!

Divorce can be an emotionally and logistically complicated process, especially when it comes to dividing retirement and pension assets. But with professional guidance and an approach tailored specifically for you, this aspect can be managed smoothly. This article explores how pensions are valued during divorce proceedings, tips to protect them, the importance of hiring an attorney for these proceedings, and why our firm may be the perfect solution for your specific needs.


How can Retirements/Pensions Be Divided in Divorce?

Dividing retirement and pension assets can be accomplished using a qualified domestic relations order (QDRO). Here are the steps:

  • Gather Information: Once married, collect all relevant details regarding any pension or retirement accounts held during marriage such as type of plan, current value, contributions made during the marriage etc.
  • Hire an Expert: For fair assessment of pensions, consult a financial expert or actuary with experience in pension evaluation.
  • Negotiate and Mediate: Work together with your spouse to come to an amicable agreement on how to divide retirement assets. Mediation may help resolve any potential disagreements while finding mutually beneficial solutions.
  • Preparation of a QDRO: With assistance from an attorney, prepare a qualified domestic relations order - a legal document outlining how a pension or retirement account will be split among spouses - that details this procedure.
  • Approval of QDRO: Submit the QDRO for court approval before sending it directly to your plan administrator to execute.


How is a Pension for Divorce Valued?

When dividing pensions during a divorce, it's essential that their value be accurately established. One common approach used in valuing them accurately is called "present value," where its worth is assessed at the time of divorce. Other factors, such as duration of marriage and contributions made during that period may also play a part.

Experts use various factors, including both parties' ages, projected retirement dates and life expectancies, to calculate present value. Once pension's value has been ascertained, it becomes a marital asset subject to division.


How Can I Prevent Loss of My Pension When Divorcing?

Protecting your pension during a divorce is vital to ensure a stable financial future. Here are some useful strategies for guarding against losses to your retirement savings:

  • Negotiate Fairly: Be open to discussing options with both your ex-spouse and their attorney until an agreement can be reached that works for all.
  • Consider a QDRO: A Qualified Domestic Relations Order (QDRO) is a legal document which outlines your former spouse's right to receive their portion of your retirement plan without incurring penalties for doing so.
  • Explore Offset Options: It may be possible for you to keep all of your pension by offering your spouse other assets of equal value as offset options.
  • Consult a Financial Advisor: Seeking advice from an expert who specializes in divorce finances can help you better comprehend the ramifications of various decisions.

How Long Do You Have to Be Married to Collect Your Spouse's Retirement?

Marriage length plays a pivotal role in determining if and how you're eligible to claim part of your spouse's retirement benefits. In general, couples that have been married at least ten years are eligible to claim their portion of that person's Social Security payments.


Why Is Hiring a Divorce Attorney Better Than Without an Attorney?

Navigating the complex waters of a divorce, particularly concerning retirement and pension plans, can be daunting. Hiring an experienced divorce attorney is key in protecting your rights and interests during this difficult time.

An experienced attorney can:

  • Provide Legal Expertise: These professionals possess extensive knowledge of divorce laws, so they can assist you through every stage of the process.
  • Negotiate on Your Behalf: Hiring an experienced attorney can assist in successfully negotiating with your ex-spouse's legal team to achieve the most advantageous result for both sides.
  • Your Attorney Will Fight for Fair Asset Division: Your attorney will advocate on your behalf for an equitable division of retirement and pension assets to safeguard your financial wellbeing.


When is it Time to Hire an Attorney?

Sooner rather than later, hiring a divorce attorney is always better. Even if your separation appears amicable at first, things can quickly turn contentious when dividing assets such as retirement funds or pensions. By employing legal advice early on in the proceedings, an attorney can protect your interests from day one while potentially preventing issues from intensifying further.


What Are the Criteria for Finding a Good Attorney?

Hiring the appropriate divorce attorney is paramount to securing a positive result in any situation, so here are some criteria you should keep in mind when making this selection:

  • Experience: When hiring an attorney to represent your divorce case, look for one with experience handling matters such as retirement and pension plans.
  • Reputation: Read client testimonials to assess an attorney's reputation and success rate.
  • Communication Skills: An attorney should possess excellent communicative abilities, keeping you updated throughout the legal process.
  • Empathy: Divorce can be an emotionally charged experience. An attorney with great empathy for the unique needs of their client can offer essential assistance during this trying time.


Why Our Firm? 

At Drama-Free Divorce, our firm excels in offering expert guidance and support during divorce proceedings involving retirement plans or pensions. Here's why our firm is ideal:

  • Years of Experience: Our team of seasoned divorce attorneys is fully equipped to offer the best representation.
  • Proven Track Record: Our proven track record speaks for itself in providing our clients with favorable outcomes that secure their retirement and pension assets.
  • Client-Centric Approach: At our core lies you. Our compassionate and personalized services strive to make the difficult journey as pain-free as possible.
  • Financial Expertise: At our firm, our team of financial specialists can assist in the complexities associated with asset division and pension valuation.


Suggested Action Steps

Once enrolled in your retirement account, start collecting all pertinent financial documents such as pension statements and account info.

  • Consult With An Attorney: For help and guidance through this difficult time, schedule a meeting with our seasoned divorce attorney who will explore all possible courses of action available to you.
  • Consider Mediation: Consider mediation as an alternative to court litigation as it can often be more cost-effective and less adversarial.
  • Evaluate Settlement Offers: When your ex-spouse offers you a settlement offer, have your attorney review it to ensure it's fair and equitable.
  • Plan for Your Financial Future: Work with our financial experts to devise a post-divorce financial plan that supports your retirement objectives.

Be assured, Drama-Free Divorce's team of professionals are here to assist and guide you throughout this arduous process. Let's work together towards protecting your financial future after divorce. Contact us today at 816 615-5555 or send us an email on our Contact Page.

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