Retirement assets accumulated during a marriage are often considered marital property, subject to division in the event of a divorce. The process of dividing these assets, specifically pensions, involves understanding the type of pension, its valuation, and the applicable state laws. For example, a defined benefit plan might be valued based on its present value, while a defined contribution plan’s value is typically the account balance.
Proper division of retirement funds is crucial for ensuring financial security for both parties post-divorce. Historically, pensions were often overlooked in divorce settlements, leading to significant disparities in financial outcomes, particularly for spouses who did not directly contribute to the pension plan. Equitable distribution aims to correct this imbalance and provide a more secure future for all parties involved.
