You can generally expect your spouse to be entitled to a portion of your pension after your Edmonton, Alberta divorce.
However, the amount the spouse is entitled to will depend on when the pension was set up. If you were earning the pension prior to the marriage then the worth of the pension fund prior to your marital date is considered non-marital property and will go to you.
Anything earned between the date of your marriage and the date your divorce is filed is considered marital property. In Alberta, your spouse has a right to 50% of all marital property.
This does not mean you are going to have to empty half of your pension fund and pay it to your spouse immediately, however. There are different ways to handle the situation.
Prioritize the Pension During Negotiations
As long as your spouse receives 50% of the value of all of your assets as valued at the time of divorce you are creating a fair divorce settlement. Dividing each asset up 50/50 isn’t the goal. You’re looking to divide the total value of your marital estate.
So if you want to keep your pension first and foremost because you don’t want to share the payouts many years into the future, make the pension a priority. Be prepared to offer other assets, such as the marital home, other investment accounts, or equalization payments.
If you are willing to negotiate your spouse may be willing to leave your retirement alone.
Keep in mind, of course, that the future value of the pension must be taken into account, as must the risk involved in holding a pension. Sometimes pension funds evaporate. Don’t give up everything just to keep the pension. In some cases it may be wiser to give your spouse a portion of the marital share. Really take the time to sit down with your attorney so you can go over your options.
Ensure Pension Payments Are Entered into the QDRO
You might opt to share a portion of the future pension benefit payment instead of giving up a portion of your pension today. The benefit here is that money remains in your account, where it continues to gather interest.
To do this, you must make sure that those future payments are entered into the QDRO, or Qualified Domestic Relations Order.
For example, you have a pension that would normally pay you $5000 a month when you begin to take withdrawals from it. You and your spouse agree they will take $1500 of that per month when you begin to draw your pension. In order for the banks to actually send that money they will need the QDRO on file.
In many cases this is less painful than dipping into the pension fund well before retirement simply to make a payment today.
Have more questions about divorce and your pension?
Even before settlement negotiations and divorce court hearings, there are a myriad of issues and questions that can arise.
Call (780) 474-7777 to get matched to an experienced Edmonton divorce attorney today.