For Tennessee residents who have been fortunate enough to have a good job, accrue significant assets and look forward to a comfortable retirement, their pension is a source of worry in a divorce. While there might be a substantial amount in the pension, they are fearful about whether they will need to share it as part of property division.
High-asset divorce can stoke hard feelings, and this is a common source of discord. As the case proceeds, it is important to consider pensions and have a grasp of the law.
What does the law say about sharing pensions in a divorce?
In general, any property that was acquired after the marriage will be marital property. When one spouse owned property before the marriage and it rose in value during the marriage, that increase will be marital property if both sides contributed to it.
The value of vested and unvested pensions and other retirement accounts will also be marital property if it came from employment during the marriage. However, if the employment was prior to the marriage and the pension benefits were accrued from it, it will belong to the working spouse. In addition, any appreciation in value will be theirs and not subject to equitable distribution in the divorce.
The court will try to calculate potential increases in value of pre-marital pension benefits after the marriage. There will be no consideration given to commingled assets with pensions, retirement benefits, stock options and other benefits. For example, if a person got a job in the financial services industry after the marriage, then the pension will be shared. If they had the job before the marriage, then it generally will not be split.
Experienced advice is essential
Divorce can be contentious and one of the most common reasons for problems to arise and fester is property division. This is especially true with complex, high-asset divorce and questions about how a pension will be shared or if it will be shared at all. For these cases, having professional assistance can be crucial to ensure a fair accounting and outcome based on the law. This is true from the perspective of the person who has the pension and the one who does not.