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How Are Pensions Divided in a Divorce?

 Posted on November 30, 2021 in Family Law

shutterstock_264841286-min.jpg Divorce obviously has tremendous emotional, psychological, and familial ramifications, but it has significant financial consequences as well.

A frequent source of consternation is how to divide up the wealth accumulated by the couple during their years of marriage. The focus is not only currently held assets, but prospective income as well – especially pensions.

Pensions can be a challenging subject during divorce, as a person’s quality of life post-retirement hinges upon them. Many people are hesitant to share a portion of their retirement assets with their spouse. However, before you panic, it is not a foregone conclusion that your ex-spouse will take the lion's share of your monthly benefit payment. Here is how Wisconsin courts divide pensions during divorce:

How Pensions Are Valued

Wisconsin is a community property state, meaning most property, wealth, and assets accumulated during the marriage by either party is considered marital property. This has ramifications for how pensions are valued.

The slice of the pension considered marital property is what will be divided between the parties.

For example, if you worked at your place of employment for 40 years, and you were married for 20 of those years, 50 percent of your pension would be considered marital property.

An actuary will then determine the monetary value of that portion of the benefit.

How Pensions Are Divided

Once the value of the pension is determined, it is generally divided between the spouses one of two ways:

Buyouts: The employee spouse may buy out the non-employee spouse. Normally, the employee spouse will exchange other marital property (such as a vacation home or stock options) in exchange for the entire pension benefit.

Splitting the pension: Sometimes the parties will choose to split the pension. This is more complicated than it seems and requires additional paperwork and a Qualified Domestic Relations Order from the court.

Contact a Waukesha County Divorce Attorney

Bucher, Wolff & Sonderhouse, LLP has years of experience helping Wisconsinites navigate life before, during, and after divorce. We appreciate the delicate situation facing our clients, which is why our approach to legal representation begins and ends with communication.

If you are searching for a Waukesha County divorce attorney that works hard for his clients, contact Bucher, Wolff & Sonderhouse, LLP today 262-232-6699 for a free initial consultation.



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