In New York, Here’s How to Keep Your Pension in a Divorce

Divorce can be one of the most stressful times of anyone’s life. When a marriage falls apart, the parties and courts must consider a multitude of issues. Will the court award alimony? Who becomes the custodial parent? Will the noncustodial parent receive adequate visitation? Who owes the debts incurred during the marriage?

Perhaps the most contentious aspect of divorce is the division of assets. In New York, the process becomes even more difficult when one or both parties own a pension. Whether you keep your pension in a divorce frequently depends on its classification. If you find yourself in a divorce in New York, you may be asking, Is my spouse entitled to my pension? Here is what you need to know to keep as much of your pension benefits as possible.

Is My Pension Marital Property?

After you file for divorce, New York divorce laws require an initial determination as to whether a pension is a marital property or separate property. The law entitles your ex-spouse to an equitable share of marital property. If your pension began or accrued during the marriage, then barring a prenuptial agreement, a piece of it will go to your ex-spouse.

How Will New York Courts Divide My Pension?

New York courts typically apply the Majauskas Formula to determine your ex-spouse’s share of your pension. The formula gives your ex-spouse one-half of the portion of your pension earned during the marriage. The formula is based on the years of service credit accrued during marriage divided by total service credit at the time of retirement. The quotient is then multiplied by .5.

For example, if you accrued 20 years of service while married and retired with 40 years of total service, your ex-spouse’s share would be 25% of the pension (.5 x 20/40).

Pension in a Divorce

How Will New York Courts Distribute My Pension?

After determining each spouse’s share, courts will order the pension appraised. Courts call this valuation. The parties then choose how to distribute the pension.

The immediate offset method is one option. Under this scheme, the spouse who earned the retirement account can retain rights to it in its entirety. Rather than taking a portion of the pension, the other spouse gives up their share in exchange for a larger share of another marital asset. Examples of comparable assets may be the marital home or investment property.

An alternative is the deferred distribution method. This method splits the benefits monthly. Under this scheme, the parties will submit a qualified domestic relations order (QDRO) to the court specifying how much each party will receive once the pension becomes payable pursuant to the retirement plan.

An Experienced Divorce Attorney Can Show You How to Keep Your Pension in a Divorce

Divorce is hard enough. When your pension becomes a marital asset, navigating New York’s equitable division laws can be overwhelming. Determining how to keep your pension in a divorce varies according to spouse pension rights. Finding an effective attorney who will guide you through the divorce pension payout process is crucial. Don’t leave money on the table. Contact Stepanian Law Firm for an attorney who is responsive to you and provides personal attention to your case.


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