![]() ![]() The spouse invests a portion of each paycheck. The employer can match funds with the employee, at least up to a point. Let’s start with 401(k)s.Ī spouse’s 401(k) is an employer-sponsored retirement savings plan. And Simplified Employee Pension plans (SEP) and SEP IRAs.Employee stock ownership plans (or ESOP).Section 457 deferred compensation plans.Tax-sheltered annuity plans (called 403(b) plans).If you can look at a statement and see the balance, it’s a Defined Contribution Plan. Defined Contribution Plans are more common. Or purchased by the spouse with the employer’s help. An annuity contract could have been purchased by the employee-spouse alone. Annuities can pay a fixed or variable amount. An annuity is a contractual right to receive a series of payments, at regular intervals, over a period of more than one full year. They’re based on years of service, prior compensation, and other factors. With a traditional pension, payments are made regularly. Defined benefit plans include traditional pensions and annuities. When the employee retires, the Defined Benefit Plan pays a specified dollar amount. These investments are controlled by the employer. Defined Benefit Plans and Defined-Contribution Plans. Whether vested or non-vested, the marital portion of any pension is subject to division in a Tennessee divorce. It’s contingent, but it’s still an asset. Maybe the spouse worked there 4 years, but vesting requires employment for 5 years. Pensions may be vested at the time of the divorce, or non-vested.Ī non-vested plan means the employee-spouse hasn’t put in enough years of creditable service to receive benefits. You need to identify those as well, in case they’re not really closed. There may be closed retirement accounts, too. That doesn’t mean it’s the only retirement asset. At the time of divorce, one or both spouses may already be receiving pensions payments. Every job the spouse ever held before and during the marriage could potentially give rise to retirement assets. On pensions. A spouse’s pension is deferred compensation through the employer. Identifying pensions and retirement assets. This process of identification, classification, valuation, and division of retirement assets is not optional, it’s required. How retirement assets are equitably divided. How retirement assets are classified as marital property or separate property.Īnd Fourth. ![]() How to identify retirement assets and pensions. ![]() You need to know how your retirement assets will be altered by Tennessee divorce law. Specifically, you need to know:įirst. Of course, age, health, education, and work history have a lot to do with a person’s options. But full retirement may still have to be delayed.įor the spouse who’s already retired, there’s probably no reasonable way to recover through employment. They have the luxury of rebuilding pensions and retirement accounts. Younger spouses still have many working years ahead of them. Reduced financial resources require a scaled-back lifestyle. It can mean a leaner future.įor mature spouses, those at or near retirement age, the consequences of a divided pension will be felt immediately. It can necessitate restructuring and rebuilding diminished assets. In many divorces, retirement plans represent more than 75% of the spouses’ net assets.ĭivision of a pension, 401(k), or IRA can have a substantial impact on each spouse’s financial security later in life. Along with the marital home, retirement plans and pensions typically represent the spouses’ greatest assets. If marital property, both spouses’ retirement must be equitably divided in divorce. Most working spouses have their own retirement, although seldom equal in value. In today’s talk, I’ll explain how pensions and retirement accounts are divided in Tennessee divorce law. ![]() My law firm represents clients in the greater Memphis, Collierville, Germantown, Eads, and Bartlett, Tennessee areas. I’m a divorce attorney and Certified Public Accountant. That includes government pensions, military retired pay, 401(k)s, and individual retirement arrangements. All other retirement assets could be divided, depending upon whether they’re marital property or not. Social Security retirement benefits are not typically considered as marital property by Tennessee courts and can’t be divided or altered by divorce. Video can’t be loaded because JavaScript is disabled: Tennessee Divorce Laws on Retirement () Tennessee Divorce Law on Retirementĭo you know how your retirement might be affected by Tennessee divorce law? In divorce, the marital portion of any pension, 401(k), or IRA is a divisible asset. ![]()
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