When you earn a pension during your career, those benefits may be one of your most valuable assets. However, it can also be one of the most contentious aspects of a divorce, especially if you and your spouse are nearing retirement. What will happen to your retirement benefits in a divorce?
Are retirement benefits divided in a divorce?
In Oregon, the courts recognize that married people have an interest in any property or debt acquired during their marriage. This is true even if the account lists only one spouse’s name. As a result, unless you created a prenuptial or postnuptial agreement that defines your pension as separate property, the court will consider your pension a part of your marital property and divide that pension in a divorce.
What happens if the court divides my pension?
If your pension is considered marital property, it can be essential to examine the particulars of your pension plan. As Investopedia notes, your options may include dividing a lump sum payout, offering a payout in exchange for survivors’ benefits or allowing your spouse to keep their survivors’ benefits after you finalize your divorce.
It is also important to remember that this division does not necessarily mean that the court will divide your retirement benefits in half. Because Oregon is an equitable distribution state, the courts will attempt to divide your property in a way that is fair to both you and your spouse. You may be able to reach an agreement with your spouse that allows them to keep one valuable asset—your house, for example—in exchange for you keeping your pension.
If you have questions about your pension plan’s division, it can be important to speak with an attorney about legal strategies that protect your financial health.