California residents going through divorce have many financial questions about the process including if their spouse is eligible to take a share of their hard-earned pension. Pensions are the sum of many years of devotion and work and are one of the most valuable assets for a peaceful retirement. However, in a divorce, that pension may be in jeopardy.
Is your pension at risk in a divorce?
In divorce proceedings, joint assets are divided by the court. To determine if a pension is eligible to be shared, the funds accrued during the marriage need to be recorded. Funds placed into the pension before the marriage are not eligible to be split or shared. Remember that a prenuptial agreement can protect your pension and other assets during divorce.
Negotiating with your partner over your pension
If your pension is determined to be a joint asset you may be able to negotiate a settlement to keep it. Your spouse may have a pension, 401K or retirement accounts that are considered joint assets. In this case, it might be worth negotiating that both parties keep their respective retirement accounts.
Surrendering assets to keep your pension
Some assets may be significantly important to your spouse and be worth surrendering in the separation to keep your pension. If multiple homes, vehicles, or other hobby or business assets are to be liquidated for equal disbursement, it could be presented for equitable trade.
If funds were added to your pension or retirement plan during your marriage, it is considered a joint asset and will be subject to splitting between the parties. Choosing to negotiate or trade for the sole right to your pension is a great choice to satisfy both parties. To find out about negotiation, asset trades, or other options it would be best to consult your financial adviser or lawyer as soon as possible after a divorce petition is filed.