Spouses who petition for divorce in Michigan might be surprised to learn that their pensions must be equally divided along with other marital assets. A pension is a fund that allows the holder to retire once they’ve reached retirement age. The pension is usually provided by the employer, typically in public sector fields like teaching, government jobs, and military duty.
During a divorce, the pension holder may lose up to half of their pension to their former spouse. A pension is considered to be a joint property like a house or savings in a bank account. However, the holder might be able to negotiate a deal with their former spouse so they can keep most or all of their pension.
Before making a decision, the pension holder should review the contents of their plan to see how much needs to be paid out. Some pension plans offer a single payout while others offer a monthly sum for the duration of the pension’s lifespan. A soon-to-be ex may agree to share the monthly payments with their spouse, or they might elect to split the current value of the pension as it stands today. They could also choose a “buy out” method which offers a different asset, like a piece of property, in exchange for being permitted to keep the entire pension.
An individual going through a divorce might consider hiring a lawyer to help them sort out the pension settlement. A lawyer could help the client figure out the true value of a pension and negotiate a settlement that’s agreed on by both parties. Legal counsel might also help the client divide up their additional joint marital assets.