Category: <span>Property Division</span>

Dividing a Business in a Divorce

December 22, 2019August 12, 2020
by Angie

When you’re a business owner going through a split, you need to know about dividing a business in a divorce. Do you have to give your spouse half of the company, will you have to sell it, or can you “buy out” your soon-to-be ex?

Dividing a business during a divorce can be a big challenge – and that’s why it’s so important that you work with a Stockton divorce attorney who understands what you’re going through and who can connect you to the experts you need to work with.

Dividing a Business in a Divorce: The Basics

During your divorce, you’ll make a lot of important decisions. You’ll have to think about child custody, spousal support, and how you’ll divide your regular assets and debts – and if you’re a business owner, you’ll have to consider what happens next in that area, as well.

Typically, you have three options:

One of you keeps the business
Both of you keep the business
You sell the business

Before you can start considering any of those options, you have to find out exactly how much your business is worth. A business valuation is an in-depth look at exactly how much the business is worth, and typically, it requires a professional assessment. So many factors can impact the value of a company, including its financial history, projected future revenues and expenses – so in the vast majority of cases, a professional valuation is necessary.

Here’s a closer look at each option you may have if you’re dividing a business in a divorce.

#1. One of you keeps the business

It’s fairly common for one spouse to keep the business. This works when one spouse is willing to “buy out” the other spouse’s interest in the company. The buyout is based on the business’s appraised value, which many people consider the most tax-efficient method of dividing some companies. In many cases, the buyout is considered a transfer of property incident to divorce, so it’s not like an ordinary buyout.

If one spouse doesn’t have the money to buy the other spouse’s interest in the company, the court may allow you to work out an arrangement for payment over time. Your attorney can give you case-specific guidance if this is a route you’re interested in taking.

#2. Both of you keep the business

Sometimes both spouses hold on to their own shares in a business. While it’s straightforward and simple to do this, it might not always be the best solution. For example, when two soon-to-be ex-spouses cannot get along well enough to manage the company effectively, it can do more harm than good. However, if you and your ex can keep things amicable – and effectively work together to keep the business going – it might be an option for you.

Related: Community property in California

#3. You sell the business

In some cases, both spouses decide to sell the entire business. When that happens, they typically split the proceeds. However, it can take time to sell a business – and it can drag out your divorce, too. If you choose to sell your business during your divorce, you’ll have to decide who’s in charge until it sells or if you can work together to manage it.

Unfortunately, there’s no one-size-fits-all approach to dividing a business in a divorce. You and your attorney – and your soon-to-be ex-spouse – will have to work together to figure out which option is right for you. Ultimately, what you decide to do will have an impact on your divorce and on your future after the divorce.

Do You Need Legal Advice on Dividing a Business in a Divorce?

If you and your spouse are splitting up – or if you’re simply considering divorce and would like to learn about what might happen in your case – we may be able to help you. Call us at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation.

Divorce

Do Prenups Work?

December 12, 2019August 12, 2020
by Angie

Do prenups work? For most people, they do – but there are certain things that can make a prenuptial agreement unenforceable when you go to court. The language in a prenup has to be crystal-clear; otherwise, either party can argue it in court.

Here are the basics about how – and why – prenups work, as well as what makes them invalid.

Do Prenups Work?

Prenuptial agreements work when they’re executed properly. In order to be executed properly, both spouses must have:

Received complete information from the other spouse regarding his or her property and finances before signing the agreement
Had at least a week between receiving the agreement for the first time and signing it, so that there was enough time to have an attorney review the agreement
Been represented by a different attorney when signing, unless he or she received full information in writing about the terms and effect of the agreement (to include rights or obligations signing the agreement would cancel out) and he or she signed a separate document that acknowledged his or her receipt of that information, as well as identifying the person who gave that information and waiving the right to an attorney

Further, prenups have to be fair to be enforceable. If the judge in your case sees that the prenup is extremely unfair to one spouse – such as leaving him or her with nothing but the clothing they owned at the time of the marriage – the judge isn’t likely to uphold it in your case.

Prenuptial agreements can only address certain things, too. Some things are off-limits, such as anything pertaining to the couple’s future children.

Related: Prenups in California

5 Things to Know About Prenuptial Agreements

Fairness matters. The court will look at your prenup to make sure it’s not going to leave one spouse destitute while the other takes it all.
Full disclosure is required. Both parties are legally obligated to disclose the truth about everything in a prenuptial agreement.
Premarital assets are usually off-limits to both parties. Most often, prenups separate premarital assets and designate them to remain with their original owners. While that’s usually the case anyway – separate property remains separate under California law – there are always exceptions.
You can set terms for alimony. Many prenups set terms for spousal support, often requiring the lower-earning spouse to waive his or her rights entirely.
You can’t include anything having to do with your (future) children. Prenuptial agreements can’t include things like child support amounts or child custody arrangements. Those things are always based on what’s best for the child at the time – and the courts won’t enforce prenups that demand custody or limit the amount of child support that one spouse will have to pay.

Related: Community property basics

What Makes a Prenuptial Agreement Invalid?

Do prenups work all the time? No. Some things can make a prenuptial agreement invalid, such as when they:

Are not in writing
Are not properly executed
Were signed under pressure from one spouse
Weren’t read fully before signing
Were rushed to the point that the signing spouse didn’t have adequate time for consideration
Contain invalid provisions
Contain false information
Contain incomplete information
Were signed without consulting with an attorney, unless the signer waived his or her right to counsel
Are unconscionably unfair

Can You Fight Your Prenup?

You can argue a prenuptial agreement in court. It’s up to the judge whether it’s enforceable – and in some cases, some parts of a prenup are enforceable while others are not. For example, the judge may rule that waiving spousal maintenance is fair, but that requiring one spouse to move out of the marital home and give up his or her vehicle may be unenforceable.

Do Prenups Work? Sometimes. Here’s How to Get Legal Help.

If you need to talk to an attorney about a prenuptial agreement, we may be able to help you. In fact, we can help you with any aspect of your divorce. Call us today at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation.

Divorce

Hiding Assets During Divorce

November 27, 2019December 6, 2019
by Angie

Hiding assets during divorce is a major problem – and if you’re caught doing so (or if your ex is caught doing so), you’ll face big problems in court. Here’s what you need to know.

Hiding Assets During Divorce

When your marriage is ending, your spouse may decide to hide some of his or her assets so you can’t get them. That’s because property in California falls under specific categories – it can be community property or separate property (and in some cases, it’s a hybrid of both).

If you weren’t active in your family’s finances, or if you aren’t up-to-speed on your spouse’s income, it may be fairly easy for him or her to hide assets during your divorce. Some spouses do this so they don’t have to share – but doing so is more than unethical. It’s illegal.

During a divorce, you must both file forms with the court that truthfully disclose all your assets. That includes bank account balances, real estate and other types of income, such as pay and support from previous relationships. If you fail to do so, or if you lie on the forms, you could be held in contempt of court or be charged with perjury.

Devaluing Assets

Sometimes the value of an asset isn’t obvious without an appraisal, and in cases like those, it’s sometimes easier for a spouse to “devalue” them. That happens when one spouse says something is worth less than it really is in an attempt to share less of its worth with the other spouse. The courts don’t allow this, and in many cases, judges require professional appraisals on things that could be intentionally devalued (like houses, jewelry, businesses and other high-dollar assets). Nobody is allowed to deliberately devalue an asset for the purpose of defrauding the court.

Why Do Some People Hide Assets During Divorce?

Usually, people hide assets during divorce to prevent their spouses from getting a fair share. Unfortunately, it’s not always easy to tell if your spouse is hiding assets. Usually, if you suspect that he or she is doing so, it’s your job to track them down so you get your fair share of the community property.

What Happens if You Hide Assets?

The judge in your case can hold you in contempt of court if you hide assets – or, even worse, charge you with perjury. Perjury is a crime, and it involves deliberately giving false information while under oath. You’re subject to prosecution for perjury if you’re testifying in court or being deposed, or if you signed an affidavit or declaration that contains information you know is false. Perjury is a felony, and it’s punishable by up to 4 years in California State Prison. It’s safe to say that perjury is something you should steer clear of, particularly when it comes to disclosing your assets during divorce. It’s just not worth the risk.

Where to Look for Hidden Assets During Divorce

If you suspect that your spouse is hiding assets, you can do a little detective work of your own. You should start by taking an inventory of your property – especially if you notice that things are disappearing from your home, like jewelry and other high-dollar items. Check for safety deposit box registrations, look in your home safe and see if you can find evidence that your spouse is investing money without your knowledge. Other than that, though, it can be difficult to tell if your spouse is squirrelling away things that belong to you – and you may need to work with a Stockton divorce attorney who has the resources necessary to help discover hidden assets.

Do You Need to Talk to a Lawyer Because Your Spouse May Be Hiding Assets During Divorce?

If you suspect your spouse is – or will in the future – hide assets, it’s important that you get legal guidance. We may be able to help you, so call us today at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation.

Divorce

Senate Bill 30 in California: New Law on Domestic…

November 17, 2019August 12, 2020
by Angie

Governor Gavin Newsom signed Senate Bill 30 last summer to balance out the law on domestic partnerships – and will soon apply to both same-sex and heterosexual couples. Here’s what you need to know.

Senate Bill 30 in California: New Law on Domestic Partnerships

Before Gov. Newsom signed Senate Bill 30 into law, domestic partnerships were only available to same-sex couples and opposite-sex couples provided that both the man and woman were over the age of 62. The original law was written before same-sex marriage was legal, as it is today.

However, starting January 1, 2020, the law will apply to all couples, regardless of gender and free from age restrictions. When a couple wants to establish a domestic partnership, they must file a Declaration of Domestic Partnership with the Secretary of State and meet these requirements:

Neither can be married to someone else
Neither can be in a domestic partnership with someone else
The couple must not be related by blood in a way that would prevent them from getting married to each other in California
Both must be at least 18, except in special circumstances
Both are capable of consenting to the domestic partnership

This means that heterosexual couples can also formally dissolve domestic partnerships using the same methods same-sex couples have used in the past.

Dissolving a Domestic Partnership in California Under Senate Bill 30

If you want to dissolve a domestic partnership in California, you could be eligible for what’s called a summary dissolution. If you don’t qualify for a summary dissolution, you have to terminate your domestic partnership through the court system.

Terminating a Domestic Partnership Through the Secretary of State

In some cases, you can dissolve your domestic partnership through the Secretary of State. You do this by filing a Notice to Terminate Domestic Partnership, but only if you meet all of these requirements:

You must read and understand the Secretary of State brochure on terminating domestic partnership (here).
You must both agree to dissolve your partnership.
You cannot have been registered as domestic partners for more than five years.
You cannot have children from before – or during – your domestic partnership.
You cannot have adopted children during your domestic partnership.
Neither of you can be pregnant.
Neither of you can own any part of land or buildings.
Neither of you can be renting any land or buildings, with the exception of your primary residence – and if you’re renting your living quarters, your lease must not include a purchase option that will end within a year from the time you file.
Your community property must be worth less than $40,000, not counting your vehicles.
Your separate property must be worth less than $40,000, not counting your vehicles.
Your community obligations (loans) must be less than $6,000, not counting vehicle loans.
You will both sign an agreement that outlines how you’ll divide your assets and debts, or that affirms that you have no community property or community debts.
You both agree that neither of you wants money or support from the other, except what’s included in your property settlement agreement.

Terminating a Domestic Partnership Through the Court System Under Senate Bill 30

If you don’t qualify for a summary dissolution, you will have to terminate your domestic partnership through the court. It’s always a good idea to talk to an attorney and get legal guidance before you end a formal relationship – particularly if you’ll be working through the court system.

Do You Need to Talk to a Lawyer About the New California Law on Domestic Partnerships?

If you’ve entered into a domestic partnership that you want to dissolve, we may be able to help you. Call us right away at 209-546-6870 to schedule a consultation with a caring, compassionate and knowledgeable divorce attorney in Stockton right now. We’ll answer your questions about child custody and child support, property division and more.

Property Division

California Divorce Law: Division of Assets

August 6, 2019March 6, 2020
by Angie

California divorce law and the division of assets can be confusing. Some things are community property and belong to both of you, and some things are separate property and belong to only one of you – and worse, some things are “commingled,” which means part of them belong to both of you together and one of you separately.

Here’s a simpler look at California divorce law and division of assets.

California Divorce Law: Division of Assets

California is a community property state, which means the things that you and your spouse accumulate during the time that you’re married actually belong to both of you. That’s true even if one of you stays home to care for the kids and house and one of you works to earn all the money. If you and your spouse acquired money or belongings during the marriage, you are both entitled to your fair share of them.

But California also recognizes separate property, as well. Separate property refers to money or belongings that one of you had before you got married, or that was given to one of you alone during your marriage (like a gift or inheritance).

Commingled property is property that one of you brought into the marriage – like a house, in many cases – but that you continued to pay for while you were married (which is the time when the things that belong to you are community property). Businesses and other assets can also be considered commingled property.

What Does California Divorce Law Say About Division of Assets for Community Property?

Under California law, you and your spouse have to divide your community properly fairly when you divorce. That doesn’t necessarily mean a 50-50 split (although it can) – it just means that you have to be fair about splitting things up when you divorce.

Sometimes people are able to simplify property division by selling the marital home and splitting the proceeds, or by otherwise reaching agreements to “trade” things between each other. For example, one party may really want the restored sports car in the garage while the other really wants the living room furniture. In cases like these, the judge will typically let couples figure out what they each want to keep during the divorce, and as long as negotiations result in a reasonably fair settlement, the judge will most likely sign off on it.

Related: Community property basics

What California Law Says About Division of Separate Assets

If you brought something into your marriage – say, a car that was completely paid for – you can typically expect to leave your marriage with it. In some cases, you may have to prove to the court that an asset was yours before the marriage; you can talk to your attorney about your situation and she’ll give you guidance.

Things like inheritances and gifts given only to one party are typically separate assets, too, although there are exceptions. For example, if you inherited a large sum of money from your grandmother and it was left specifically to you and not your spouse, there’s a good chance that you don’t have to split it with your spouse when you divorce. However, there are always exceptions – so if you have a situation like this, talk to your attorney so you can get case-specific legal guidance.

What if You And Your Spouse Can’t Agree?

Your attorney will most likely encourage you to reach an agreement on property division with your spouse. There are several good reasons for this – one being that it’s much more cost-effective to agree with your spouse than it is to engage in a time-consuming court battle over your belongings – and it’s nearly always in your best interest to try to negotiate. Often, when people go to court and ask the judge to divide their property after filling out a Schedule of Assets and Debts, both parties walk away feeling as if they lost (even if they get many of the things they wanted). However, when you negotiate a settlement on your own, you’re more likely to walk away feeling reasonably satisfied with the outcome.

Do You Need to Talk to a Stockton Divorce Lawyer About California Divorce Law and Division of Assets?

If you need to talk to an attorney about the way California divorce law addresses division of assets, we can help. Call us right away at (209) 546-6870 or get in touch with a Stockton divorce attorney online to schedule a consultation today.

Divorce

Social Security and Divorce in California

May 1, 2019August 4, 2020
by Angie

Social Security can be a tricky thing to separate during divorce – but if you or your spouse receives it, here’s what you need to know.

Social Security and Divorce in California

In some cases, divorced people are allowed to receive a larger Social Security benefit than they ordinarily would on their own. That can occur when one party receives benefits on the other party’s record.

How Can You Receive Benefits on Your Ex-Spouse’s Record?

Regardless of whether your ex-spouse has remarried, you could be eligible to file for his or her Social Security benefits if you meet certain conditions. The Social Security Administration will calculate your benefits for you – you don’t calculate them on your own – and you can’t receive both your benefits and your ex-spouse’s benefits. Instead, you’ll get whichever is higher.

Conditions to Receive Your Spouse’s Social Security After Divorce

If you want to collect benefits based on your ex’s work record, you must meet these conditions:

You must have been married for 10 or more years
You must not be married curently
You must be age 62 or older

Collecting your spouse’s Social Security benefits is very different from an IRA or pension – those are typically calculated differently by plan administrators. Additionally, retirement accounts are treated like community, separate or commingled property.

What if You or Your Spouse Remarries?

If you remarry, you’re typically not allowed to collect benefits on your ex-spouse’s record. However, if your marriage to someone else ends – either by death or divorce – you could be eligible again.

It’s okay if your spouse remarries, too. His or her remarriage will not affect your benefit amount – and the Social Security Administration won’t even notify him or her that you’re receiving the benefit, so you don’t have to worry about that, either.

Related: Divorce and pension payout

Are There Exceptions to the Age Rules?

There are two exceptions to the rule that says you must be age 62 or older to collect Social Security on your ex-spouse’s record after divorce:

If your ex-spouse is deceased, you can collect benefits when you reach the age of 60
If your ex-spouse is deceased and you are disabled, you can collect benefits when you reach the age of 50

For the most part, you don’t have to wait for your ex-spouse to start collecting his or her benefits before you can receive them. If your ex qualifies and is over the age of 62 and you’ve been divorced for more than two years, you may be able to begin collecting benefits on his or her record.

What if You Work? Can You Still Collect Your Spouse’s Social Security Benefits?

Many people are eligible to collect Social Security after divorce on their spouse’s record and work at the same time. However, if you haven’t reached full retirement age and you make more than the yearly earnings limit, you’ll get reduced benefits. Currently, the annual earnings limit for people under full retirement age, or FRA, is $17,640 – but that’s subject to change, and you can check what the current limit is here.

Related: IRAs and divorce

What Special Paperwork Do You Have to File With the SSA for Social Security After Divorce?

You don’t have to file any special paperwork with the Social Security Administration in order to collect benefits on your spouse’s work record. You can apply for benefits online here.

Do You Need to Talk to an Attorney About Social Security and Divorce in California?

If you’re divorcing your spouse, we can help you sort through all its complexities – and you deserve a tough divorce attorney by your side throughout the process.

Call us at 209-546-6870 to schedule a consultation with an experienced divorce and pension attorney. We’ll answer your questions and start building a strategy that gets you the best possible outcome.

Divorce

IRAs and Divorce

April 27, 2019August 4, 2020
by Angie

Like other assets, IRAs – individual retirement accounts – are considered community property in many California divorce cases. But IRAs in a divorce aren’t always considered community property; in fact, they can be pretty complicated to sort out.

Here’s what you need to know about your IRA and divorce in California.

Related: Divorce and pension payout

IRAs and Divorce

Your individual retirement account may be yours and yours alone, or part of it may belong to your spouse. Even if it does belong to you alone, you may end up negotiating with it during your divorce. Your Stockton divorce lawyer will give you case-specific advice based on your situation.

The state of California treats IRAs the same way it treats other types of property. Your IRA can fall into one of three categories: separate property, community property, or commingled property.

IRAs as Separate Property

If you contributed to your IRA before you were married, and not during the time you were married, it’s generally considered separate property. There are exceptions, though, which you and your attorney can discuss. Separate property is property that only you have the rights to – your spouse does not have any rights to your separate property.

IRAs as Community Property

If you contributed to your IRA after you were married – such as, for example, when you started a new job as a newlywed – the state of California generally considers it community property. That means it belongs to both you and your spouse, because you made the contributions with money that belonged to both of you at the time.

IRAs as Commingled Property

If you or your partner had a pension or retirement benefit from a job you had before and during your marriage, some of your contributions to it are considered commingled. When an IRA is commingled, the contributions you made to it before your marriage are separate property and the contributions you made to it during your marriage are community property.

In cases like these, it’s sometimes beneficial to hire an expert who can help sort through all your contributions over time and zero in on what portion of your IRA is community property and what portion is separate property.

After you separate from your spouse, the state considers the contributions you make to be separate property. However, like everything else in divorce, there are some exceptions – so it’s in your best interest to discuss the specifics of your case with your attorney.

How Do You Divide an IRA in a Divorce?

When the whole situation is pretty clear-cut, such as when all your contributions are either separate or community property, dividing an IRA in divorce is just like dividing other property. You may choose to use your IRA as a negotiation point, or you and your spouse can agree to split the benefit.

No matter what you choose to do, your attorney will suggest that you work it out on your own without having to litigate it in court, though. When you and your spouse are able to reach an agreement together, rather than forcing the judge to decide who gets what part of your IRA in the divorce, you’ll both be more satisfied with the outcome.

Can a Spouse Get an Entire IRA in a Divorce?

In some cases, through negotiation, one spouse can get the other spouse’s entire IRA in a divorce. However, the judge in your case will only sign off on an agreement you make if it’s fair to both parties – and that means one spouse can’t take everything and leave the other in the poorhouse.

Do You Need to Talk to a Lawyer About IRAs and Divorce?

If you’re divorcing your spouse and you have an IRA, we can help you sort things out.

Call us at 209-546-6870 to schedule a consultation with an experienced divorce and pension attorney right now.

Divorce

Dividing Retirement Assets in a Divorce

April 22, 2019August 4, 2020
by Angie

Dividing retirement assets in a divorce can be complicated – and in many cases, it requires preparing a QDRO and hiring a professional to get an accurate value. Even if it’s relatively simple, you’ll still need to account for it in your divorce settlement. In many cases, you’ll have to split some of what’s in your retirement account.

Related: Retirement and divorce settlements

Dividing Retirement Assets in a Divorce

In some cases, both spouses agree to keep their own pensions and retirement accounts without taking any part of the other spouse’s. However, when one spouse doesn’t have a retirement account – or when one has a much smaller retirement asset than the other does – the courts may order the couple to split these assets.

You are absolutely free to reach your own agreement with your spouse rather than fighting over retirement assets in your divorce. In fact, your attorney will probably suggest that you come to an agreement on your own rather than litigating; that’s because it’s simpler and more cost-effective for you to hash things out with your spouse.

Unfortunately, some spouses are completely unwilling to negotiate. In cases like those, your attorney can fight hard to preserve your rights and ensure that dividing retirement assets in your divorce is a fair, equitable process.

Dividing Retirement Assets in a Divorce: Community or Separate Property?

Retirement assets can be community property – as in they belong to both of you – or they can be separate property that belongs only to one spouse. They can even be a mix of the two.

Retirement Assets as Community Property	Retirement Assets as Separate Property
If you contributed to your pension while you were married, it is most likely community property unless you addressed retirement assets in a valid prenuptial agreement.	If you contributed to your retirement assets before you were married, but not during your marriage, it’s most likely considered separate property that belongs to you alone.

What if the Retirement is Covered in a Prenup?

Many divorcing couples in California have prenuptial agreements, which can cover all kinds of things about property division. In your prenup, you and your spouse may have agreed to several things, including the rights and obligations you each have when it comes to property (even if it was acquired during your marriage) and spousal support.

If a retirement account is included in your prenuptial agreement, it’s a good idea to talk to your attorney about it. The prenup can’t be grossly unfair – if it is, the court may find that all or part of it is invalid.

Related: Prenups in California

How Does Payout Work After You Divide Retirement Assets in a Divorce?

If one spouse is entitled to part of the other spouse’s pension, the payout depends on the plan. Different retirement systems have different processes.

For example, when you’re dealing with a military retirement account, the length of the marriage determines whether the participant (the person who earned the benefit through military service) pays the alternate payee (his or her spouse) or the money comes directly from the Defense Finance and Accounting Service.

In other cases, such as when you must file a qualified domestic relations order, or QDRO, the payout usually takes between 60 and 90 days. That’s because the plan’s administrator has to process the documents and set the wheels in motion. Every plan is different, however, so yours may happen more quickly or it may take longer.

The bottom line: When you divide retirement assets in a divorce, several factors determine how the payout works and how long it takes. Your Stockton divorce attorney will be able to give you more specific guidance when she has all the facts of your case.

Related: Divorce and pension payout

Do You Need to Talk to a Lawyer About Dividing Retirement Assets in a Divorce?

If you need to talk to an attorney about dividing retirement assets in a divorce, we’re here to help. Call us at 209-546-6870 to schedule a consultation with an experienced divorce and pension attorney. We’ll answer your questions and start building a strategy that gets you the best possible outcome.

Divorce

Divorce and Pension Payout

April 17, 2019
by Angie

Divorce and pension payout.

Many people come to us who need to know about their rights to a pension – either their own or their spouse’s – and they want to know how payout works. Here’s the scoop on divorce, pension payouts and the division of retirement accounts for people who split up.

Divorce and Pension Payout

In many cases, one spouse is entitled to part of the other spouse’s pension. The payout depends on the plan – different systems have different requirements.

Related: Retirement and divorce settlements

What Happens to My Pension in a Divorce?

Pensions, like other types of assets in a divorce, can be community property or separate property. They can also be a mix of the two. Here’s how it works:

If you contributed to your pension while you were married, the contributions you made during that time are typically considered community property.
If you contributed to your pension before you were married or after you divorced, the contributions you made during that time are typically considered separate property.

Many pensions are a combination of separate and community property, which means they can be difficult to figure out. Some people hire a pension expert to assist them with the process.

Like other types of assets, pensions are divided equitably between the parties – but only the parts of the pension that are community property. (See why some people hire pension experts?)

Can You Agree to Keep Your Own Pensions if You Both Have Them?

You don’t have to worry about divorce and pension payout if you each have your own pension and agree to keep them separate when you divorce. In many cases, judges don’t have a problem with couples who agree to arrangements like this. However, every case is different – and what works in one divorce doesn’t necessarily work in another. You’ll need to talk to your Stockton divorce attorney if you each have a pension that you’re interested in keeping for yourselves; he or she will be able to give you the guidance you need.

How Long Does it Take to Get Money From a QDRO?

A qualified domestic relations order is a court order that gives one party a right to a portion of another party’s retirement benefits. Typically called QDROs for short, the person who earned the benefit is called the participant and the person who receives a share of the benefit is an alternate payee.

The court will issue the QDRO – from there, it can take between 60 and 90 days to begin receiving the benefit (and for the participant to see the difference in his or her benefits).

Every retirement plan is different, though. Getting money from a QDRO largely depends on how long it takes a plan administrator to process the documents.

How Divorce and Pension Payout Work in Military Cases

It’s a common myth that in order for a military pension to be split between parties to a divorce, the couple must have been married at least 10 years. That is not true, but it most likely stems from the fact that after a couple is married 10 years or more, pension benefit payments can come directly from the Defense Finance and Accounting Service, or DFAS.

In a military pension case, the former spouse may be entitled to a portion of the service member’s retirement account regardless of how long they were married. The pension payout depends on the service member’s pay grade at the time of the divorce, though – not his or her pay grade at the time of retirement. For example, if the couple has been married for 12 years and the service member is at the pay grade of E-6 at the time of the divorce (and at the pay grade of E-9 when he or she retires), the pension award is based on the pay grade of E-6 rather than E-9.

This recent change in the law means that divorced spouses are only entitled to a portion of the service member’s pension based on when the court granted the divorce – not the service member’s full pension amount at the time he or she retires.

Do You Need to Talk to a Lawyer About a Divorce Pension Payout?

If you’re not sure how pensions should be divided in your divorce, or if you’re considering divorce and one or both of you have a pension plan, we can help you.

Call us right now at 209-546-6870 to schedule a consultation with an experienced divorce and pension attorney. We’ll answer your questions and start building a strategy that gets you the best possible outcome.

Divorce

Retirement and Divorce Settlements

April 12, 2019August 3, 2020
by Angie

For many people, retirement accounts and divorce settlements are confusing. Will your ex-spouse get your retirement? Will your divorce settlement require you to give over half what you planned to retire on?

Here’s what you need to know.

Retirement and Divorce Settlements

If you or your spouse has money tied up in a retirement plan, you’ll need to account for it in your divorce settlement. The type of retirement plan (or plans) that you have will determine how you’re supposed to split this asset.

You can be years away from retirement and still have to split some of what’s in your retirement account in your divorce settlement. In California, the law allows for two types of property: separate and community.

Retirement, Divorce Settlements and Separate Property

Separate property is property that belongs only to you or only to your spouse. If you have separate property, you take it with you in the divorce.

Contributions you made to a retirement account before you were married generally count as separate property. If you put money into your retirement account for, say, 10 years before you married your spouse, the contributions you made during that decade are yours and yours alone.

Retirement, Divorce Settlements and Community Property

Community property is any property you and your spouse acquire during your marriage. The courts divide your community property (or you and your spouse reach a fair agreement on your own community property) when you divorce.

Contributions you made to a retirement account during the time that you were married count as community property. The court can divide this part of your retirement account between you and your ex-spouse.

If you contributed some money to a retirement account before your marriage and some money after your marriage, you have both separate and community property. Only the money you put in and benefits you earned during your marriage count as community property, but it can be a little bit complicated to sort through it all so you can follow the law.

Should You Hire a Pension Expert?

For some people, the best solution is to hire someone who understands how retirement accounts and divorce settlements work in California. The person you hire can work out all the math and help ensure you’re following the law.

However, you don’t have to hire a pension expert. You and your spouse are free to reach an agreement on how to divide your retirement account – and that might even include doing something like waiving your rights to each other’s pensions.

What is a QDRO?

A QDRO is a qualified domestic relations order. The QDRO is a court order that explains the details on splitting up certain types of pensions. It grants one spouse certain rights to the other spouse’s pensions.

What Should a QDRO Include?

A QDRO must include, at minimum:

The name and last known mailing address of the participant and alternate payee (the person receiving the benefit through the divorce settlement)
The name of each plan that the order applies to
The dollar amount or percentage – or, alternatively, the method of determining the amount or percentage – of the benefit that must be paid to the alternate payee
The number of payments or the time period to which the order applies

Some plans require additional information, as well. This is just the bare minimum.

If you’re filing for separate retirement plans, such as if you had two jobs with pensions that cover some portion of the time you were married, you must file a separate QDRO for each.

Your attorney – and your pension expert, if you choose to hire one – will explain what you need in your situation.

Do You Need to Talk to a Lawyer About Retirement and Your Divorce Settlement?

If you’re divorcing and you or your spouse has a retirement plan, your divorce settlement needs to reflect it. We may be able to help you, so call us at 209-546-6870 to schedule your consultation with a Stockton divorce attorney now. We’ll also answer your questions about child custody, child support, spousal support and property division.

Category: <span>Property Division</span>

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