You never planned to get divorced, and so you never really planned for retirement. Your spouse has an incredible benefits package as a CEO, after all. You know you do not have to worry about retirement. That pension is going to pay for a very high standard of living, even when he or she is not working anymore.
Then, about two years before that time, your spouse files for divorce. The marriage falls apart quickly.
You feel shocked. Not only is this not the outcome you expected, but now you have all sorts of doubts about your future. It is too late to go back to work. It is too late to save for retirement on your own. You do expect to make out fairly well in the property division process, but you wanted the income that pension plan represented. Can you still get it?
A QDRO
You may, but you may have to use a QDRO to do it. This order gets passed down by the court, and your spouse has to follow the order to the letter. It does not matter if they think it is unfair or if they don’t want to follow it. They are bound by the order in full, barring some other legal agreement that the two of you settle upon.
The order essentially breaks up the pension plan between the two of you. It allots a percentage of it to you, as if you were still a participant in the plan. When the monthly payments come in, that percentage must get paid out accordingly.
For instance, perhaps the QDRO states that you should get 50% of the pension plan. Please note that it typically only applies to the parts of the plan acquired during your marriage. Maybe your spouse already worked there before you tied the knot, but your marriage lasted for half of their total employment. You could then claim 50% of that half of the pension plan, or 25% of the total.
Is it the same?
You may find that this does not support the same standard of living that you expected. The reason, though, is that you do not share costs. You need your own home now, for instance. Your spouse still gets 75% of the plan, rather than sharing 100% with you, as they would have done without the divorce.
Even so, the payout could be very significant. You do not want to overlook this crucial part of your marital assets. Make sure you know what steps to take, what rights you have in Colorado and how to set yourself up for the future — even when that future does look a bit different than you once believed it would.