Divorce has become a common occurrence across the country today and the same can be said for high-asset divorce. A divorce is labeled as high-asset when there are significant assets being divided in the agreement. They come in the form of properties, money, investments, collections or retirement accounts.
When it comes to pensions, a pension that is earned during the course of a marriage typically belongs to both parties in the marriage as a joint asset. But, the bottom line here is that it is ultimately up to the court to decide how the pension will be handled. The court will also determine if the survivor benefits are payable.
A court order is required for a person who has been divorced to obtain a share of their former spouse's pension. The court order is not required when the pension involves Social Security and Tier I Railroad Retirement benefits.
When a couple plans to get divorced and divide a pension, it typically should be done when the divorce is in the works as other assets are divided. The court order that is required when dividing a pension in divorce is known as a domestic relations order.
If the domestic relations order meets specific requirements, the majority of retirement plans will pay benefits directly to the divorced spouses. The domestic relations order that meets these requirements is known as a qualified domestic relations order (QDRO).
A high-asset divorce is a situation that requires the experience of a knowledgeable divorce attorney in Crystal Lake. This is without a doubt a process you do not want to navigate on your own.
Source: Pension Rights Center, "Pension Rights After Divorce," accessed July 12, 2017