If you are considering a divorce, you most likely have a million questions about the process. Perhaps you are thinking: “My husband wants a divorce, what are my rights?”, or maybe you are simply seeking a good divorce lawyer. Either way, one of the most common questions we get is: What are my rights when it comes to my spouse’s pension during a divorce in the Commonwealth of Virginia?
What Is A Pension Vs A Retirement Account (401k/IRA)?
Most pension plans today are received by people working for the government, be it federal, state or local. Less commonly, a pension may have a pension from a private employer. With a pension plan, the employee and employer contribute to the plan during the time they were employed. Upon retirement, the employee receives a fixed monthly payment for the rest of their life.
A retirement account, on the other hand, is similar to an investment account. In this case, the employee and employer pay into an account typically tied to the stock market. When the employee retires, the money in the account can be used however the employee pleases. The money can be withdrawn slowly over many years, or cashed out entirely. If you have a retirement account, read how to protect your 401k in a divorce.
Property Distribution
There are two types of assets and property in a divorce: separate and marital. Separate property is anything acquired before the marriage. Marital property is anything acquired during the marriage. It is marital property that is considered for distribution during a divorce.
When it comes to divorce law and property rights, the U.S. is divided into community-property states and equitable-distribution states. Virginia is classified as an equitable distribution state.
In community property jurisdictions, assets acquired during marriage are divided 50/50. In Virginia and other equitable distribution states, however, property is distributed equitably or fairly. Depending on your or your spouse’s individual financial situations, assets may or may not be distributed equally.
How Are Pensions Divided In Virginia Divorces?
Divorce law is complicated, and the answer to this question is not always cut and dry. In many cases, how a pension is divided will depend on how long you were with the employer that is providing a pension, and more importantly, when.
For example, let’s say you worked for a pension employer for five years before getting married. You then continued to work for the employer for another 15 years during your marriage. According to the State of Virginia, the pension benefits you acquired during the years before your marriage are separate property. However, the 15 years of benefits accrued during your marriage are marital property.
At the end of the day, this means that your spouse may be entitled to up to 50 percent of the pension benefits accrued during the time you were married. But again, because Virginia is an equitable distribution state, you and your spouse may come to a separate agreement, and/or the courts may come to a different conclusion than simply dividing the 15 years of benefits 50/50.
Conclusion
Pensions and divorces are complicated subjects, and navigating divorce law is tricky no matter your personal situation. That’s why it’s important to obtain qualified legal help to assist in guiding you through the process.
