Divorce can be one of the most stressful and all-around worst times of your life. And a big part of that is trying to split up what was once your joint finances. If you’re going through (or considering) a divorce in Virginia, you’ll want as complete an understanding of the process as possible.
One of the most pressing issues for many going through a divorce is what happens with a pension. Pensions are meant to be the nest egg that funds a retirement, but when a couple breaks up, everything is in jeopardy. Knowing your options in family law regarding your pension is crucial.
Pensions and divorce
A pension is a joint asset, meaning when a couple divorces, each spouse is usually entitled to a portion of the funds. But there’s one very important detail here. The pension is only considered joint property to the extent that you earned it while married.
So, for example, if you’ve been accruing benefits for 30 years but only have been married for the last 10 years, the contributions toward that pension for the first 20 years aren’t joint property. Your spouse would only be able to receive a portion of the benefits gained in the last decade.
Usually, the only option you have at your disposal if you want to keep your entire pension is to barter something else with your former spouse in exchange for keeping the pension. One option might be to let them take ownership of a communal home or something else of significant value. Another possibility might be to take out a life insurance policy of equal value to your pension, with your former spouse being the beneficiary.
You may not have to split your pension plan funds if you negotiate your share of the assets during a divorce settlement.