Gray divorce – which is defined as the divorce of a couple whose members are at least 50 years of age – is becoming more common. Retirement is certainly something that these couples are thinking about, so they understandably want to know how to protect their benefits.
Perhaps you know that your spouse is going to get a pension plan when they retire in the next five years or so. That plan should be enough for the two of you to live together without needing any additional income, so you saw it as a retirement plan for both of you. But now that you are thinking about getting divorced, you are naturally very worried about losing access to the pension plan, since it is provided through your spouse’s employer. Is it possible to protect these benefits so that you can still retire comfortably?
You can use a QDRO
One way to accomplish this aim is to use a QDRO, which is a qualified domestic relations order. The QDRO will address what percentage of those future pension payments should go to your spouse and what percentage should go to you. Once the court officially issues the order, your spouse will be obligated to send you those monthly payments.
Exactly how the court determines what percentage you should be paid will depend on many factors having to do with your marriage. Perhaps most important is simply when you got married and when your spouse began earning that pension. With standard types of income, you usually only have to divide the money that was earned while the two of you were married. The same basic principle applies to a pension.
For example, say that a pension plan pays out $10,000 a month. You would each get $5,000 if it was split perfectly in half. But your spouse may only have been married to you for half of the time that they worked at that business, so then you would only get 25% of the pension, or $2,500 per month. These numbers are just an example, however, and every case is unique. As you move forward, be sure you know exactly what legal steps you’ll need to take to secure what is rightfully yours.