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While there are many considerations to take into account when filing for a divorce in Michigan, how it will affect your ability to retire should be a key concern.  It is often said by divorce lawyers to their clients that it is more expensive to support two separate households than it is to maintain one, which means that after the divorce there is less disposable income for both spouses.  This also affects the amount of money that one will be able to set aside for retirement after the divorce and does not even take into account that almost all retirement accounts are subject to equitable division in a divorce case.  This blog is written to generally address what will happen to a pension in a divorce in the State of Michigan, if you have specific questions, please schedule a consultation by clicking this link or calling (248) 608-4123.

Is My Pension Subject to Division in a Divorce Case in Michigan?

The short answer is yes, in most cases.  While pensions are unfortunately not as common as they once were, some executives, IBEW and some other union members, teachers and other state employees may be entitled to pension payments.  Typically what will happen is that the court will equally or equitably divide the pension between the parties as if both spouse's were participants in the pension plan and assign each person half of whatever pension benefits were earned or accumulated during the time of the marriage.

Some pensions require the employee to work a number of years or other programs may assign a point program and once a certain number of points are earned then the employee becomes entitled to pension benefits.  Whatever number of years were worked or points earned during the marriage will be subject to division in a divorce.  For example if the participant spouse would have been entitled to a payment of $1,000 per month which was all earned during the marriage, then the court will enter what is known as a Qualified Domestic Relations Order or (QDRO) and that will be forwarded to the pension plan administrator.  The administrator will then set-up a second account for the non-participant spouse just as if they were a participant and assign half of the benefits to the non-participant spouse.  The result in this example is that each spouse would then be entitled to receive $500 per month whenever they are eligible to start getting the monthly payments.  

This blog provides only a broad explanation with a very simple example of how the court will divide retirement benefits (pensions in particular) in the event of a divorce.  If you have questions about your specific situation, please contact us either by clicking on this link or calling (248) 608-4123 to schedule a consultation.