The community estate owns all the property acquired through the time, toil and effort of both spouses during marriage. Thus, to the extent you have participated in any retirement plans through your employment during marriage, the resulting interest in the plan is community property, even though it may be unvested and will almost certainly be unavailable to cash in at time of divorce.
A defined benefit plan - Think of this as the plan which eventually yields a monthly pension check - can be divided at time of divorce by a special order directing the plan administrator how to allocate the future payments when the time comes. The portion of the payment attributable to your time on the job both prior to marriage and after divorce is factored out, so that you do not have to divide that portion with your ex-spouse. Your ex-spouse will be liable for reporting and paying income tax on the money he or she receives from your pension plan. Your spouse's interest in the pension plan may continue on after your death, depending on the elections you make. If you chose the joint and survivor option, then the payments to your spouse will continue until his or her death, at which point they will terminate. The timing for receipt of money from such a plan is subject to the terms of the plan itself, and will be primarily based upon your age and years of service. Your ex-spouse will have no control over that, and must comply with the terms of the plan. The divorce court will have no authority to make any orders concerning your pension plan which are not in compliance with the terms of the plan. A defined contribution plan- Think of this as a 401k type plan into which you contribute money from your pay, sometimes matched to some extent by your employer - can also be divided by a special order directing the plan administrator to segregate your spouse's portion into a separate account to be placed under his or her control. That portion will then become your spouse's property and, unlike an interest in a defined benefit plan, can be passed on to his or her designated heirs at death. Your spouse will have some options he or she can choose independently, such as withdrawing all of his or her portion (subject to taxes and in most instances a withdrawal penalty) or rolling it into an IRA in his or her name with the power to direct the investment of the assets. Social Security retirement benefits- If you have been married more than ten years, then your spouse will have the right to receive a monthly Social Security payment equal to one-half of the amount payable to you (which does not come out of your portion, but is in addition to the full payment to you). Or, if your spouse was the higher earner in your marriage, and you were married over ten years, you can elect to receive either your earned benefit or one-half of your spouse's benefit, whichever is more. You cannot receive both. Also, should you remarry, you will be giving up the right to receive monthly payments based on your current spouse's or your most recently divorced spouse's earnings record. Naturally, all Social Security benefits are subject to changes as may be enacted by the United States Congress from time to time, so you must plan to visit your local Social Security office to determine what benefits will be available to you when you near retirement age. For more information please call us today at 972-569-3166 and speak to one of our Board Certified Family Attorneys regarding your case.