Retirement funds are one of the trickiest assets to handle during a divorce. These resources are critical for keeping you secure in your golden years, especially Social Security and pensions. If your marriage has lasted a long time, you’ve probably been planning your retirement with those funds in mind. Now that your marriage is ending, you need to create new plans based on your updated budget.
That’s why it’s so important to understand how pensions and Social Security payments are handled during Oregon divorces. Here’s what you need to know about how permanent retirement benefits like pensions are split during a divorce and how to make sure you can claim what’s rightfully yours.
Are Social Security Funds or Pensions Considered Marital Assets?
During a divorce, the only assets that are split are the ones that are considered part of the “marital estate.” In Oregon, something is regarded as a marital asset if it was acquired during the marriage.
For example, all wages you and your spouse earn during your marriage are concerned joint assets. Meanwhile, the money you earned before your wedding remains your sole property. However, there are exceptions. That’s where Social Security and pensions fall. These resources may be considered marital assets only if you meet certain conditions.
Why? Because these kinds of assets don’t have a hard number attached to them. There’s no way to properly appraise the lifetime value of a pension or Social Security fund because the payments are intended to continue until the recipient dies. Furthermore, many of these funds are adjusted based on inflation and cost of living, so even the individual payments are subject to change.
As a result, dividing a pension or Social Security payment is complicated. To simplify the process, only people who meet specific criteria can receive part of these types of plans during a divorce.
Are You Eligible to Receive Part of Your Spouse’s Social Security?
Social Security is based on a person’s work record. The exact amount a person receives per month depends on long they were in the workforce and paying the Social Security tax. When it comes to requesting those benefits, there are two sets of rules for determining eligibility for Social Security based on a former spouse. There’s one set if your ex is alive and another if they’ve since passed away.
You’re eligible to receive part of your living ex-spouse’s security payments if:
- Your marriage lasted longer than a decade
- You’re not currently married
- Half of your ex-partner’s benefits would be greater than your total Social Security benefits
- You’re 62 or older
- Your partner is eligible to begin receiving benefits
- You’ve been divorced for at least two years.
If your partner has already passed away, you need to follow a different set of rules. You’re eligible to receive benefits on their work record if:
- Your marriage lasted longer than a decade
- Your benefits would be lower than what you could claim on your spouse’s work record
- You’re either 60 or older, or disabled and 50 or older
If your spouse is deceased, you don’t need to wait until they would have been eligible for Social Security as long as you meet the criteria. Furthermore, you can get remarried and continue to receive your ex-partner’s benefits as long as you marry after you’ve reached the age of eligibility.
Are You Eligible to Receive Part of Your Spouse’s Pension?
As complicated as dividing Social Security may seem, pensions can be even more difficult. Pensions are much less likely to be nationally standardized. Furthermore, while a pension is typically considered a joint asset, how much you’re eligible to receive will vary on a case-by-case basis.
The easiest pensions to divide are those of military members and government workers. These types of benefits are governed by specific rules that determine how they’re split. While you’re eligible to receive part of your spouse’s military pension no matter what, you can only receive those retirement benefits directly from the Department of Defense if:
- Your marriage lasted longer than a decade
- At least a decade of your marriage overlapped with your spouse’s qualifying military service
Furthermore, no court can award you more than 50% of your spouse’s military pension.
Other types of pensions follow a slightly different set of rules. If your spouse receives a pension from a private organization, it’s considered a joint asset, just like an investment or retirement account. You’re immediately eligible to receive part of it during the divorce. However, only the portion of a pension earned during the marriage is considered during the division of assets.
For example, suppose your spouse worked for the company offering them a pension for five years before you got married and for another five years of your marriage. In that case, half of the pension is their sole property, and half of the remainder is their share of the marital asset.
Unless you negotiate, the most equitable split will leave you receiving 25% of the pension. However, if your spouse continues to work at the job after your breakup, the portion of the pension considered marital assets could shrink. The best way to navigate private pensions during a divorce is to negotiate a clean percentage of monthly payments that will come to you to avoid those kinds of diminishing returns.
Don’t Leave Retirement Funds on the Table
Planning for retirement is hard enough on its own. The additional complications of Social Security and pension funds can make the process even more confusing. That’s why you need to work with an experienced Oregon divorce attorney if you want to split permanent retirements benefits during your divorce.
Your lawyer will help you negotiate your fair share of your spouse’s pension and help you make sure you have the funds you need to retire. You can start planning for your future today by scheduling your consultation with the experts at Regele Law, LLC. They’ll help you understand your situation and fight for you to receive everything you need to enjoy your golden years in comfort.
