Am I Entitled to My Spouse’s Pension After a Wisconsin Divorce?

 Posted on May 31, 2023 in Family Law

UPDATE: Am I Entitled to My Spouse’s Pension After a Wisconsin Divorce?

Originally published: May 25, 2022 -- Updated: June 1, 2023

Update: As mentioned below, issues related to pensions can be complex factors to address during the divorce process. It is important to understand how the value of a pension will be determined as a couple addresses issues related to the division of marital property. This is not always easy, because at the time of a couple's divorce, retirement may be multiple years or decades in the future. Since pension benefits are usually based on the amount of income a person earns at the time of retirement, it may be difficult or impossible to determine the full value of pension benefits until a person is closer to retirement.

In many cases, the best way to address pension benefits is to determine the portion of the benefits that are considered to be marital assets and divide that portion equally between the spouses. The marital portion of pension benefits can be determined by dividing the amount of time that a spouse worked and earned a pension while a couple was married by the total amount of time they worked in a pension-eligible position during their career.

For example, consider a situation in which a spouse began working in a pension-eligible position five years before they got married, continued working in that position for 15 years during the couple's marriage, and after getting divorced, worked for another 20 years before retiring. The total number of years worked is 40, and the couple was married for 15 of those years, or 37.5 percent of the person's career. Thus, the marital portion of pension benefits would be 37.5 percent.

The marital portion of pension benefits may be divided equally between spouses. In the example above, if the spouse receives $5,000 per month in pension benefits, the marital portion of those benefits would be $1,875. Half of this amount is $937.50, which is the amount that the other spouse would be able to receive. To ensure that pension benefits can be divided correctly, a couple can create a QDRO that will specify the percentage of benefits that should be paid to the other spouse.

Contact a Waukesha, WI Pension Division Attorney

As you address pensions or other types of marital property during the divorce process, it is crucial to understand the best steps to take to ensure that all assets can be divided fairly and equitably. At Bucher, Wolff & Sonderhouse, LLP, our Oconomowoc asset division lawyers can provide legal guidance in these matters, and we will work to help you negotiate a divorce settlement that will meet your needs. Contact us at 262-232-6699 to set up a free consultation.

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.

While pensions are just one part of the overall larger marital estate, they can have a substantial influence on the divorce proceedings for many couples, especially those approaching retirement.

Contact a Brookfield, WI Lawyer for the Division of Marital Property

If you are considering a divorce, but understandably have questions about the financial impact it will have on your future, you can trust the Waukesha divorce attorneys at Bucher, Wolff & Sonderhouse, LLP to share their knowledge and experience with you. Whether it is for questions about pensions, other retirement accounts, or the division or marital property in general, we can answer your questions and guide you through the process. We stress communication throughout the divorce process and will provide you with strong, experienced legal representation. Call us today at 262-232-6699 for your free initial consultation.

Source:

https://docs.legis.wisconsin.gov/statutes/statutes/766.pdf