Often, retirement benefits are the most valuable asset a couple has to divide. It is therefore imperative that you have early and accurate information regarding the division of any retirement assets and an attorney who understands how to properly value and divide these assets.
What Happens to Retirement Benefits in Divorce?
Nebraska Law Regarding Retirement Benefits
Nebraska law considers vested pensions to be marital property subject to division. Unvested pensions only provide the non-participating spouse with an expectancy interest in the pension. There are various ways to value pensions in Nebraska, and if the parties do not ultimately agree on a value, they may be required or ordered by the court to bring in a neutral expert to perform a pension valuation.
The Different Types of Retirement Benefits
Retirement benefits can vary greatly, especially between the private and public sectors, but generally, you can think of retirement benefits as fitting into two general groups:
- Defined benefit plans – these were plans people often knew as “pensions,” are far less common today than in the past. In a defined benefit plan, the employer promises to pay a set amount to the retiree over a certain period of time (usually until the retiree’s death). The amount is often based on a calculation including salary and years of service. These plans are far more complicated to divide than defined contribution plans.
- Defined contribution plans – In these plans, the employer and/or the employee make defined contributions during the employee’s employment tenure, which are then paid out after retirement. The most common of these are 401(k)s and 403(b)s. The types are plans are usually divided with a Qualified Domestic Relations Order, which is prepared by the parties’ attorneys, and they are far easier to value and divide than defined benefit plans.
The divorce attorneys at Nebraska Legal Group, P.C. have specialized knowledge in the division of all forms of retirement accounts, including military retirement.
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Frequently Asked Questions
Do you need a lawyer to assess and divide pensions and retirement accounts?
Yes, it is always advisable to involve your lawyer as early as possible in the process when discussing the key elements of a divorce settlement:
• The division of assets (including retirement)
• Child custody and visitation rights
• Child support
• Spousal support
Because divorces are emotional times for the parties concerned, an experienced divorce attorney can mitigate the stress and help you make clearer decisions that are in your immediate and long-term interests.
When it comes to pensions and retirement accounts, this can be a complex area that requires experienced advice and knowledge of various pension systems. An expert may need to be hired to value a pension and/or to prepare the QDRO.
You need someone to help guide you with:
• How retirement benefits are divided?
• Who is going to pay?
• When are payments going to be made?
• For how long will payments apply?
You also require a lawyer who understands the relevant changes to the law regarding pension payments to ex-spouses. Mistakes can cost you many thousands of dollars.
Our lawyers have specialist knowledge in this area, including in the division of military retirement benefits. Our lawyers also know the right experts to help value and/or divide retirement benefits.
Common mistakes with dividing retirement benefits
Mistakes are commonly made in this area – even by established Nebraska lawyers. These can be very costly.
Some typical errors include:
• Not addressing the survivor benefit in the first decree (and therefore losing your rights to the benefit)
• Not understanding that retirement benefits are pre-tax (so withdrawing cash will be taxed)
• Not notifying the plan administrator that there will be a division of the plan
How our lawyers can help you reach fair results
The experienced lawyers at Nebraska Legal Group can help ensure that you’re not losing thousands of dollars by incorrectly dividing pensions and retirement benefits.
Over the years, we’ve worked with so many different pension plans for the benefit of our clients that we have built considerable specialist knowledge of how to get the best results.
We will guide you towards an agreement that is fair and equitable and that can be approved by the court.
So that we can look out for your best interests, involve your lawyer at the beginning of your divorce discussions before you start dividing assets.
Need help with the division of retirement benefits in Omaha?
Call Nebraska Legal Group at (402) 509-7033 or get started with a free case evaluation.
Contact Us
Email:
info@nebraskalegalgroup.com
Omaha Office
Phone:
402.509.7033
Address:
Two Old Mill, 10855 West Dodge Rd
Suite 240
Omaha, NE 68154
Lincoln Office
Phone:
531.248.5050
Address:
6940 O Street
Suite 314
Lincoln, NE 68510