Pension Appraisal for Divorcing Spouses
Settle your finances and understand a pension appraisal before getting to court--no matter where you live, pensions and 401ks are considered marital property, and the value is sometimes many times the value of your home. This is something that is very serious for both parties to understand and follow through on.
A Pension Appraisal is a good way to be ready for the future and still find an amicable solution to both spouse's needs. I'll explain why this is important now and later. This is sometimes referred to as a QDRO, which means, Qualified Domestic Relations Order, or an order issued by the court to separate a pension into appropriate amounts for each spouse. The couple goes to court, the court orders the pension appraisal during the divorce proceedings, but then--here's the kicker--the spouse being awarded a portion MUST follow through and do the QDRO ASAP.
Why using a Pension Appraisal is important NOW:
- If the partner with the pension dies or has time to withdraw the money, even the court order won't be able to help.
- Do it as soon as you leave the court house with your divorce decree! Come back here to follow the QDRO link to a trusted site that will do a great job evaluating the pension.
- If one partner is putting away money each month while another stays home to care for children, let me tell you, the one who is home is also not contributing to Social Security and has no pension.
- Generally, it's the male who puts more money into the pension and or/investment funds, and it's the females who take time off from working to care for children and don't contribute to the funds during the time she is home.
- Yet, it is understood during a marriage that these assets are to be shared--for better or for worse, right? That is why I feel very strongly that it's a good idea to do the pension appraisal, even if there is a fee now. It may pay you a lot later on when you really need it. Here's why:
Why using a Pension Appraisal
is important LATER:
- If you are male, you may want to do this just so you know what you might have to give up if your wife is taking you to court, to check to see how the finances would turn out, or if you are very considerate and wish to be fair. This may be a good bargaining tool for you later if it's in your favor!
- If you are female, you had better know what you will be missing out on if you do absolutely nothing! Especially if you have had a long-term marriage, you will WANT to get a pension evaluation done.
- If your spouse is older than you, and therefore, you assumed he'd be retiring earlier and so you agreed to contribute more money to HIS pension, you will also want to do an evaluation.
- Women live longer, and with divorce rates as high as they are, the courts are not taking into consideration the fact that women will be needing to use the Social Security System more also, but if women are not contributing to it, guess what? There is less money for them! So you had better get any and all pension money you are entitled to while you can.
- Both parties should have to work longer if need be, not just one!
Where/How Do I get a Pension Appraisal?
That is the easy part! You go to QDRODesk, and fill out the survey. The fee is much cheaper than attorney's fees, and well worth all the months you'll receive in pension or 401k benefits in the future.
The best company and service I've found is QDRO(under the company name of Pension Appraisers Online, Inc.) They have a BBB rating of A-, and are BBB Accredited. What more could you ask for?
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Disclaimer: The information on this site is for educational purposes only. It is not legal advice and may not apply to your situation. I take the time to gather the best information to those going through divorce, and offer a place for readers to learn, get support and fantastic resources, and find applicable products that are a good fit for them. You can support this site by purchasing high quality products or services from the sponsors I link to.