As divorce among those 50 and older becomes more common, questions about post-retirement finances take on greater importance during the division of marital assets. One of the most important of these assets is retirement savings accounts, including pensions. You may have been relying on your spouse’s pension as a major source of your retirement savings. An experienced divorce attorney can help you determine how much of a pension you may be entitled to and what your options moving forward are.
Pension Division in a Wisconsin Divorce
During a marriage in Wisconsin, most property, assets, and other wealth that the couple accumulates is considered marital property. Since Wisconsin is a community property state, if the couple gets divorced, the property will be divided between the two spouses. This includes assets such as pensions. Whatever percent of the pension that your spouse accumulated while you were married would be subject to division. If your spouse began working and earning the pension after you were married, the entire pension would be considered marital property and subject to division.
The value of the pension must be determined by an actuary before it can be divided. Additionally, spouses can negotiate exactly how the pension will be divided. The spouses could choose to each receive their share of the pension directly. This requires a QDRO, or Qualified Domestic Relations Order to avoid any early withdrawal or tax penalties. The second option is for the spouse who earned the pension to buy out the other spouse’s share of the pension. This can be accomplished by using their portion of other marital assets, including the marital home, vehicles, or other financial options.
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