You’ve been working your entire adult life and have a well-funded pension account with your employer. Maybe you are getting close to retirement age, or perhaps you intend to work for another decade or more. Unfortunately, it looks like your marriage is about to end, and your spouse wants a portion of your pension.
It’s common to have a strong emotional response to this situation. You may find yourself wondering what will happen with your pension in a divorce. After all, your pension is a benefit that you receive for working with a company. Does your spouse who perhaps didn’t work full-time or who doesn’t have a pension of their own receive some of that in the divorce?
While you may have opinions on the topic, you also need to understand the laws in Maryland regarding asset division in a divorce. Those laws will impact what happens to your pension.
In many cases, the courts may choose to divide your pension
When the courts have to determine how to split up your assets, they use a legal standard known as equitable distribution. Many different factors will influence which assets the courts allocate to each spouse.
Those factors range from the length of your marriage to your current medical situation and earning potential. The courts will also consider non-financial contributions to the family by both spouses.
If your spouse stayed home to raise your children or care for your home, that work went unpaid and contributed substantially to the financial circumstances of your family. As a result, they will likely do their best to split assets in a manner that is fair for both you and your former spouse.
Most times, this process will involve dividing all assets acquired during the marriage. Regardless of whose name is on the account, the pension you have accumulated during the marriage is probably marital property owned by both of you. Unless you have a prenuptial agreement that specifically allocates your pension only to you, your spouse may receive a portion of it in the divorce proceedings.
The courts may not divide the pension itself, in some cases
There are many different ways that the courts can handle the division of complicated financial assets like pension accounts. In some cases, they may actually order the account administrator to split the account and deposit a percentage of its contents into a separate account for your spouse.
Other times, the courts may use the value of the pension to offset other assets they allocate to your spouse. In some cases, the courts may even order spousal support for the duration of the pension to ensure that your ex receives a fair portion. Talking with an attorney can help you determine which outcome would be optimal for your situation.