The Impact of Retirement Benefits on Division of Property in Divorce

Feature Article

How Pension Plans Affect Property Division in Divorce Cases

When it comes to dividing assets in a divorce case, most people typically focus on their marital home and other tangible assets. However, many couples often overlook the impact of pension plans on property division. Pension plans can have significant effects on property division, particularly in cases where one spouse owns a vested pension while the other spouse does not. In this article, we will discuss the impact of pension plans on property division in divorce cases. We will also explore how family law attorneys can help their clients navigate the complexities of pension plans and property division in divorce cases.

The Basics of Property Division in Divorce Cases

In Arizona, property division follows the concept of community property. This means that all assets and debts acquired during the course of the marriage are considered community property and are subject to a 50/50 split. However, certain assets may be exempt from community property such as property received as a gift or inheritance. Pension plans, on the other hand, are not excluded from community property regardless of whether they were vested before or during the marriage.

Understanding Pension Plans

Pension plans are retirement plans that allows an employee to accrue retirement benefits over time. These plans are typically sponsored by employers, but some plans may also be funded by employees themselves. The benefits are usually calculated based on a formula that takes into account the employee's years of service, age, and salary.

How Pension Plans Affect Property Division

In Arizona, pension plans fall under the category of deferred compensation. According to Arizona's community property law, any compensation that is deferred must be divided like any other marital property. Pension plans can have a significant impact on property division, particularly if one spouse has a vested pension while the other does not. In such cases, the spouse without a pension may be entitled to a larger share of the other spouse's assets to compensate for the pension. Alternatively, the spouse with the pension may be ordered to pay a portion of the pension to the other spouse to even out the distribution of assets.

The Importance of Working with a Family Law Attorney

Divorce cases involving pension plans can be complex and require the expertise of an experienced family law attorney. A skilled attorney can help their client understand the complexities of pension plans and the impact they have on property division. Working with an attorney can also help ensure a fair and equitable distribution of assets. An attorney can help their client negotiate the distribution of assets, or they may need to litigate the case in court.

The Bottom Line

Pension plans can have a significant impact on property division in divorce cases. Couples who are going through a divorce should consult with an experienced family law attorney to ensure that their pension plans are properly factored into the property division process. An experienced attorney can help ensure a fair and equitable distribution of assets and advocate for their client's interests in court. For more information on how pension plans affect property division in divorce cases, visit azcriminalandfamilylaw.com.