Often divorcing couples will opt to divide their marital property by giving one spouse the home and the other spouse the pension. This easy way of dividing marital property may leave one spouse at a disadvantage that isn’t recognized until retirement.
While a house may have emotional value, it may not have the same monetary value as a pension that pays lifetime benefits (the former wife of Nevada governor Jim Gibbons may end up regretting the division of the couple’s retirement assets in their recent divorce).
Ultimately, there are numerous ways to ensure an equitable division of the property, but only when the pension is properly valued is the final result truly equitable. Again, the best way to value marital property, including a pension, is to obtain legal representation (see the first blog entry in this series).
Note that some state, city, and county retirement systems will not pay retirement benefits to a former spouse. If you are or have been married to an employee or retiree of a state or local government you may want to read our fact sheet on State Retirement Systems and Divorce.
Tomorrow’s blog entry will provide additional resources for divorce and retirement issues.
Read the rest of the blog entries in this series: