The Division of Retirement and Pension Benefits
When a couple is getting a divorce in Utah, the law requires that their marital property be distributed fairly, which is called equitable distribution. Money that the spouses contribute to any type of retirement or pension plan during the marriage is considered marital property and is subject to equitable distribution.
The types of retirement and pension benefits that spouses may contribute to include 401(k)s, employer benefits, defined payment plans and defined benefit plans. Some military retirement plans as well as government pensions and retirement plans may also be included if either of the two spouses contributed to them.
When it comes time for the equitable distribution of marital property, each spouse may be granted his and her own retirement or pension benefits if both spouses had a plan. Utah courts generally allow spouses who contribute to the retirement or pension benefits to keep those benefits while the other spouse is compensated with property of equal worth, such as cash or home equity. However, the benefits may be split if no property of equal worth is available to compensate the other spouse.
While spouses could agree on the equitable distribution of retirement or pension accounts on their own accord, this does not always work out. When couples cannot come to an agreement on their own, the court applies a formula to determine how the benefits are divided. This formula splits the value of the benefits in half and multiplies the result by the duration of the marriage in years. That result is then divided by the total years that the spouse worked. However, some factors that can impact this formula include any unreasonable actions of a spouse and when the couple separated.
When the spouses agree on the matter of property division, a judge has to review the agreement to ensure that it is fair. The spouses may find that lawyers are able to better protect their rights during this process, because property division agreements cannot be changed after they are finalized, unless there are special circumstances.
Source: Utah Courts, “Retirement and pension plan benefits“, December 01, 2014
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