Divorce in Maryland can be complicated regardless of a person’s age and financial situation, but there are certain demographics that have more targeted concerns about their future when they are ending a marriage. This is especially true for older individuals who are relatively established in their careers, might be a few short years away from retirement and are counting on pensions to get them through.
A divorce can throw a wrench into even the most well-formulated plans and could trigger a dispute as to how assets will be divided. Having experienced legal assistance to navigate this complex terrain can be essential.
Facts about pensions when getting a divorce
Retirement savings, in general, are a concern for most people, but pensions are a prominent worry especially for state and federal employees – of which there are many in Maryland. Good benefits are a primary reason people take these jobs and naturally, employees hope that their pension will accord them a comfortable life in retirement. However, getting divorced can upend that. Remembering vital points about a pension in a divorce is key.
Pensions can be divided in a divorce, so it must be accurately calculated as to:
- How much it will be
- When it will be paid
- How it will be paid
- The importance of the estimate vs. its reality
The estimate is crucial as it could be different when it is assessed. A company that offered a pension could have its own financial challenges that negatively affect the value of it and require changes to the divorce settlement.
Equitable distribution and QDROs
Maryland is an equitable distribution state, meaning that property is split fairly among both spouses. With that, the property will be divided in a way the court deems reasonable and that is not always 50/50.
With pensions, Maryland law typically views these as marital property, depending on the circumstances. If the pension is to be divided, a qualified domestic relations order (QDRO) will likely need to be created, approved by a judge after the divorce is finalized and submitted to the pension plan administrator. This QDRO will then inform the plan administrator on the logistics of when and how to divide the pension benefits.
Dealing with pensions may require legal advice
Future financial security is a primary concern when people are getting a divorce. To ensure a person’s rights are protected with property and asset division and the pension is distributed fairly, it is useful to have professional guidance throughout the process. This is a beneficial first step regardless of the situation.