An individual’s pension can be a significant asset in a dissolution of marriage action. Therefore, it is critical to address how to properly divide this asset as well as that “what if” scenarios that may occur in the future, such as a spouse quitting their job or being placed on disability. Without proper legal statements in your divorce decree to address these possible situations you may be left with no way to collect the portion of a pension you were entitled to.
Generally, within divorce proceedings, pensions will be considered marital property and the court will equitably divide the value of the account between the spouses. However, only the amount accrued in the pension during the time of the marriage is what will be divided, not necessarily the account’s entire value. When an amount is awarded to a spouse, a Qualified Domestic Relations Order will be entered directing the employer to make certain payments to the former spouse. In some cases, the spouse may be able to elect to receive a lump sum payment at the time of the divorce, in others the spouse may wait until the employee spouse retires to then begin receiving these payments. In the later scenario, a problem may arise if the spouse quits or is fired from their position prior to reaching retirement age, therefore, losing the pension benefit and the former spouse will also lose the funds they were awarded under their divorce decree.
In the case of Lynch v. Lynch, the husband was an employee of the State of Florida and maintained a pension with the Florida Retirement System. During their divorce proceedings, wife was awarded 50% of the marital portion of the accrued pension. However, husband later was placed on disability and no longer was eligible to receive the pension benefits. Wife sought a Motion to Enforce the divorce decree, and trial court ordered the husband to pay the Wife her entitled portion. However, husband refused and was held in contempt of court. Husband appealed the order, and it was reversed by Florida’s 5th District Court of Appeals. The court found “that [although husband] owes [wife] the money, he correctly argues that contempt is not the proper method of enforcement.” Therefore, the employed spouse will endure no legal punishment, and the only available option to a spouse seeking payment is to take the route of remedies available to a creditor.
If pension division is a piece of your divorce decree, it is imperative to discuss the scenarios surrounding loss of the pension benefits. Without such notation in your divorce settlement, you will be left with remedies similar to that of a creditor, attaching or levying on the property of your former spouse. Pensions can be an extremely delicate and complicated topic to divide between a couple going through a divorce. However, it is crucial to address these items as well as the minor details about receiving payments and the possibility of losing a job or being placed on disability to ensure your financial status is protected in the future. Talk with and experienced attorney today to determine your specific needs in your divorce case.
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