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Division of Retirement Assets In A Divorce

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This is Eric Amat Y Leon, Partner with Burnham Law. We are here today to talk about issues involving the division of retirement assets in a divorce case.

Increasingly, retirement assets are the largest assets in a divorce case. There are a lot of issues to consider. It’s a very complicated area of law that not a lot of attorneys are very well-versed in. You have issues involving valuation, calculating marital portions. Survivor benefits are a huge issue to consider. There are offsets.

I’ll give you a couple of examples in cases that I have been a part of, to work through where the attorneys and even the judge have just really gotten things wrong and really highlight the benefit of having a quality professional in your corner.

One area is pensions. Pensions are probably more common in the public sector. There are still a couple of private pension plans out there. When we talk about a pension, we’re talking about a monthly annuity at retirement for life. Many attorneys value these pension interests.

For example, you might have someone who might get $1,000 a month when they retire, and an attorney might value this pension interest at, let’s say, $500,000. They go to court, and when it comes time to divide the interest, the judge simply says, “Okay, each party gets $250,000.” Well, it’s kind of a problem because when retirement hits, all you have to divide is $1,000 a month. And if you have an order that says one party is getting $250,000, but all you can tap into is $1,000 a month, how are you going to put that into practice?

Another example that I saw a couple years ago, which was fairly prejudicial, was one party had a retirement asset, a pension plan with a present value of $100,000, and also had a 401(k), also valued at $100,000. Attorneys think, “Okay, we’ll give one person the pension, and we’ll give the other one the 401(k), and each will get $100,000.” Well, they’re not quite the same.

If you have a 401(k), you can loan against it. You can take distributions. It’s a lot more dynamic than with a pension plan, which is nothing until the person hits retirement age and then starts getting a monthly annuity at retirement.

So, you have a lot of care when you’re offsetting retirement interests. Again, there’s not a lot of attorneys who are really well versed in pension law. For this and other strategies, please visit us at

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