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What you should know about your pension in a divorce

On Behalf of | Apr 7, 2021 | blog, divorce

Divorce can take a significant toll on your emotions and finances. Property division can be challenging if you have a pending pension plan. Usually, a pension is considered a joint asset, which means the value of the pension must be divided in a divorce. If you’re a Florida resident and facing a marital split, there are some important factors to consider when you need to protect your pension.

Review your state laws

The first step you should take in managing your pension during the property division process is knowing the rules. A pension can be divided between spouses during a divorce, but the division is not automatic. The spouse who does not hold the pension must request a share of the value of the pension before the divorce is final. In most cases, the spouse needs to file a Qualified Domestic Relations Order (QDRO). The filing is necessary before the spouse can receive any financial benefits from a pension or other qualified retirement accounts.

Review your pension plan details

Once you know the property division rules in Florida, you should assess the way your pension plan works. It is important to focus on how the payments are distributed and whether the pension plan provides survivor’s benefits. You’ll normally have a choice between a monthly annuity payment or a lump-sum payment. If the pension has a single-life payout and you select the annuity payment option, the payments will stop when you pass away. If the pension has a joint-life payout, the surviving spouse will receive payments until their death.