In New York, filing for divorce requires an equitable division of marital assets, which includes retirement options like pensions. How the court determines how much of your pension an ex-spouse receives relies on several factors and can have a direct impact on your retirement future. One of the most reliable ways to evaluate your situation is to sit down with a knowledgeable divorce attorney with extensive experience with the financial consequences of divorce. Below is some general information about what you might expect when you have a pension that is subject to marital asset consideration in a New York divorce proceeding.
Divisions of a Pension in a New York Divorce
Typically, New York law views pensions as a joint asset in a marriage, as well as other retirement account options like IRAs and 401(k)s. While earned pension benefits before getting married are usually considered individual property, this may not be as straightforward in a divorce.
One factor that can cloud this situation is not knowing the exact value of the pension. If you are not currently receiving a benefit check or know its frequency, quantifying its value as a divisible asset is difficult. Further, a court may not split this asset evenly. The amount of pension earned during the marriage can impact how much remains as your separate asset or as part of the marital property.
New York Domestic Relations Law Regarding Distribution of Assets
The state of New York uses an equitable distribution method when dividing assets and debts during a divorce. The court intends to ensure that any marital property is fairly distributed between both spouses. It is important to understand that fair does not mean an equal amount, but as it relates to the circumstances of the divorcing couple. If couples cannot agree on how to settle this aspect of their divorce, the court will step in and do so for them using this approach, which could potentially be an unfavorable situation for one or both parties.
To avoid a distribution that could leave you with a significant financial loss, it is critical to work toward making an agreement that you and your ex-partner can both compromise on. This may require hiring a skilled New York family law mediator to help facilitate communication, or you may need to retain an experienced divorce attorney if mediation is not an option.
How New York Divorce Courts Divide Contested Assets Using the Majauskas Formula
If you and your ex-spouse cannot agree on how to divide your marital assets, you will have to rely on the court to decide for you both. The Majauskas formula is how most courts determine how assets will be distributed and may give your spouse half of your earned pension during the marriage. There is a threshold where if you had earned 15 years of benefit while married, and retired with 30 years total, then your ex-spouse would receive 25% of your pension instead.
Keep in mind that the Majauskas formula is just one of several equitable distribution methods used by New York divorce courts to divide a pension.
Other ways it may be divided include:
- Using specific dates to calculate an ex-spouse’s share
- A set dollar amount
- Modification of the Majauskas formula for your circumstances
How much each spouse earned during the marriage and/or how much each of you contributed to the marital home may also impact a court decision. Further, some circumstances of the marriage that may have led to the divorce could also influence this calculation.
Contact an Experienced New York Family Law Attorney Today
When faced with potentially losing part of your retirement income when dividing marital assets, many spouses experience intense anxiety about their financial futures. Fortunately, there are many ways to create an equitable distribution that can soften the impact on your pension plan or possibly protect a large portion of it from this process.
Seeking the services of a reputable New York divorce attorney to learn more about how to protect your retirement is a critical first step in any divorce process. The Law Office of Katherine Ryan P.C. provides extensive experience and client-focused dedication that will see you through every step of your New York divorce proceeding.
Attorney Katherine Ryan provides demonstrated experience in complex financial divisions of assets in a divorce. As a recognized SuperLawyer, she has helped thousands of divorcing couples reach agreements on how their assets should be divided. Our firm represents clients in Garden City, Nassau County, Suffolk County, Westchester County, and Long Island. Contact The Law Office of Katherine Ryan, P.C. today for a comprehensive evaluation of your family law issue.