Can an Ex-spouse Claim Your Pension after Divorce? (2024)

• Are you worried about your pension going to your ex?
• Will my pension be split in our divorce settlement?
• Methods of pension division
• How will the division of my pension be calculated?
• Property division depends on your state
• FAQ about pension benefits after divorce

When a couple divorces, one spouse can claim a portion or all of the retirement benefits, including pension benefits, earned during the marriage. This depends on where the couple lives, as state laws vary.

Are you worried about your pension going to your ex?

Will your ex-spouse get some of your pension? It’s complicated.

If your pension plan was funded during your marriage, it could be fair game in divorce. It’s seen as marital property, which means the court may divide it. But don’t panic. Laws are in place to protect your pension rights when you part ways.

Each case is unique

Generally speaking, if the couple was married long enough for one individual to be vested in their pension plan, the money derived from that plan is considered marital property and may be subject to division by a court during divorce proceedings. If this happens, a former spouse may receive a lump sum, or they may be entitled to monthly payments from the pension plan or an annuity contract resulting from those benefits.

It's important to note that there are laws in place that protect spouses from being cut off from their pensions when going through a divorce. That said, each case is unique and should be discussed with an attorney before furthering any actions.

Will my pension be split in our divorce settlement?

This is a common question; the general answer is, “Maybe.” Any asset acquired while two people are married is subject to asset distribution in divorce. This means if your pension was funded, even partially, during your marriage, your spouse may be entitled to half of the portion that was funded while married.

Methods of pension division

Equalization payment

If your former spouse is eligible to receive part of your pension, it may be possible for them to receive an equalization payment instead of direct access to your pension. In this scenario, a court would determine how much of your pension your spouse is entitled to. You would then make a payment to them for that amount, keeping your full pension intact.

QDRO

Your ex-spouse may receive direct compensation from your pension through a qualified domestic relations order, or QDRO. A QDRO is a court order that allows one spouse's share of the other person's pension to be transferred into another account, such as an individual retirement account (IRA) or 401(k).

QDRO steps

1. Gather information. You need to collect all relevant details about the retirement plans involved. This includes plan names, account numbers, and balances.
2. Draft the QDRO. This document specifies how your retirement assets will be divided.
3. Obtain spousal approval. Both parties should review and agree on the QDRO. If there are disagreements, it may require negotiation or court intervention.
4. Get plan administrator approval. The plan administrator must review the QDRO to ensure it complies with the plan’s rules. They can approve or reject the order, or ask for revisions.
5. Submit the QDRO to the court. Once the QDRO has received approval from the plan administrator, it must be submitted to the court for review. The judge will then sign and finalize the order.
6. Implement the QDRO. After the court approves the QDRO, it goes back to the plan administrator for implementation. The retirement assets are then divided according to the terms of the QDRO.

Need help with your QDRO? Our trusted partner, SimpleQDRO, can help.

How will the division of my pension be calculated?

To understand the answer to this question, it helps to first understand the differences between two distinct property categories: marital property and separate property.

Read: What Is Marital Property in Divorce?

What is marital property?

Marital property is any type of asset or debt acquired during the course of a marriage, like a pension. Both spouses are considered co-owners regardless of whose name is on the deed or title. This means that each spouse has equal rights to the property upon divorce.

What is separate property?

Separate property is anything owned by one spouse prior to the marriage or acquired through inheritance or gift during the marriage. These assets remain the sole and separate property of that spouse after divorce, provided the assets were not commingled with marital property.

If you know divorce is imminent, take steps now to protect your financial health in your post-divorce life. Read about how to find and work with a certified divorce financial analyst, or CDFA, here.

Property division depends on your state

In terms of how your pension would be divided in divorce, it depends on whether your state follows the principle of equitable distribution or the principle of community property. It’s vital that you understand and follow your state’s rules, as every state is slightly different in its process.

Examples of pension division in community property states

In a community property state like California, all assets acquired during the marriage are considered the property of both spouses. It doesn’t matter who actually earned them. Thus, upon divorce, all marital assets (including retirement plan assets like a pension) should be split 50/50 between spouses.

Victoria and Albert: Divorce after a long marriage in California

Meet Victoria and Albert, a California couple who decided to divorce after 32 years of marriage. Albert was the breadwinner in the family and, during the divorce, his pension became an issue for distribution. Every dollar Albert contributed to his pension during their marriage is shared and thus, subject to division. Victoria is entitled to half of the pension benefits accrued during their 32-year union.

Tom and Tina: A breadwinner in a Texas

Now consider Tom and Tina. In this 18-year marriage, Tina was the main financial support for the family, and her employer provided her with a pension. In divorce, because Texas is a community property state, Tom will be entitled to half of the pension benefits.

Examples of pension division in equitable distribution states

In an equitable distribution state, the government recognizes that some assets may have been acquired solely by one spouse’s efforts. Thus, the court may divide assets unequally if they deem it just and fair to do so. Furthermore, in equitable distribution states, pensions received before marriage are considered separate property and not subject to division upon divorce.

Robert and Rita: What is fair?

Meet Robert and Rita. They’re parting ways after a 22-year marriage in Florida. Because Florida is an equitable distribution state, this means all marital assets, including Robert’s pension, won’t necessarily be split 50/50. The court will consider several factors such as each spouse’s contribution to the marriage, the length of the marriage, each spouse’s individual economic circ*mstances, and more. While Rita may have a claim to Robert’s pension, it’s not a given that she’ll receive half. The court’s objective is fairness, not exact equality.

Paul and Pamela: Contributions within the marriage

Paul and Pamela have been married for 15 years. Since Illinois follows equitable distribution, Paul would have a claim to Pamela’s sizable pension. The amount and percentage, however, would depend on the court’s analysis of each spouse’s contribution to the marriage, the length of the marriage, and each spouse’s individual economic circ*mstances post-divorce.

Note: Most states in the U.S. are equitable distribution states rather than community property states.

FAQ about pension division after divorce

How long after divorce do I have to claim my spouse’s pension?

There is no hard and fast rule on this. Generally, a claim can be brought at any time until a consent order is put in place. However, waiting too long after your divorce could make obtaining a share of your former spouse’s retirement benefits more difficult, or even impossible. To avoid legal complications, it’s advisable to address the issue of pension division as part of your divorce proceedings.

What does the term “vested” mean, and how might it affect my pension benefit?

Vested means you’ve earned the right to receive a pension benefit in the future. Typically, vesting occurs after you’ve completed a certain number of years of service with your employer. Once you’re vested, you have a guaranteed right to receive your pension benefits, regardless of whether you remain with the employer until retirement. This can affect your pension benefit during a divorce, as only the vested portion of the pension is considered a marital asset subject to division.

Will I continue to receive my ex’s pension benefit if my ex dies?

This depends on the type of pension plan and the terms set out in the divorce decree. If your ex-spouse had a pension that provides survivor benefits, and if you were named as the beneficiary, you should continue to receive benefits after your ex’s death. However, if the pension doesn’t provide survivor benefits or you weren’t named as the beneficiary, you would likely stop receiving benefits upon your ex’s death.

Can a marital settlement be changed after divorce?

A marital settlement agreement usually cannot be changed after a divorce has been finalized. However, certain aspects, like child support or alimony, can be modified if there’s a substantial change in circ*mstances. To change a marital settlement agreement, you would need to go back to court and demonstrate why the change is necessary.