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Pensions - Vested and Unvested from a Rhode Island Divorce Lawyer's Perspective!

Are you in a Rhode Island Divorce?  Will your pension vest before the Final Judgment of Divorce is entered?  What can be distributed by the Rhode Island Divorce Judge?

If either party in a Rhode Island divorce has a pension then there are various issues you will want to consider.  Specifically, the divorce issue we want to address here is that of "vesting." 

You can find out if your pension is vested for the purposes of your Rhode Island divorce by contacting the administrator of your pension fund and simply asking if your pension if your pension is vested or not.  You also may want to asked your pension administrator when your pension will vest (become vested) just in case the date might occur during the course of your Rhode Island Divorce proceeding.

ISSUE

The Rhode Island family court judge only has the power to order the equitable distribution of marital assets, including pensions. 

If you or your spouse has a pension that is not vested, what part of the pension, if any, is subject to the Rhode Island family court's power of equitable distribution?

If you or your spouse has a pension that is vested, what part of the pension, if any, is subject to the Rhode Island family court's power of equitable distribution?

ANSWERS

The only part of a vested or unvested pension that is subject to equitable distribution/division by the Rhode Island Family Court Judge is the "marital portion" of the pension.

The marital portion of any pension is dependent upon various circumstances, including (1) the length of the marriage, (2) the type of pension (civilian or military) and the laws governing it, and (3) whether the pension is vested or not.

While it may be the Rhode Island family court judge's role to determine after trial what the marital portion of the pension may be, it is the job of each spouse and his or her divorce lawyer to present to the court what part of the pension is the marital portion.  Sometimes your divorce lawyer may be able to argue that a larger portion of the pension is actually the "marital portion" if it is to your benefit to do so.  However, if there is disagreement between spouses and/or their divorce lawyers regarding the true manner in which the marital portion should be calculated, proof may be presented at trial.

Proof of the marital portion of the pension that is subject to distribution by the Rhode Island family court may require expert testimony by way of an actuary who substantiates the basis for claim and the amount of it.  Without this information, your Rhode Island divorce judge may not have sufficient information for determining the basis, amount or validity of your claim on that pension.

The issue of whether a pension is vested or not is of substantial benefit to both spouses, the court and an actuarial expert if one is necessary. 

If the pension has not vested at the time of the entry of the Final Judgment of divorce, then the pension payments themselves are not subject to distribution in the future.  Since the pension is not vested then the body (corpus) of the pension is only made up of the contributions made to the pension.  There is no entitlement to the benefits of the pension after it vests simply because a spouse may have an entitlement to a portion of the monetary contributions to the pension.

If the pension is vested prior to the entry of the Rhode Island Family Court's Final Judgment of Divorce, then the benefits of the pension itself provided by the "vesting" of the pension during the marriage are subject to distribution of the Rhode Island family court.

Thus, the family court's distribution power in Rhode island in a divorce proceeding is limited to either (1) the financial contributions made to the pension when it has not vested prior to the entry of Final Judgment of Divorce, or (2) the benefits provided by the pension when it has vested prior to the entry of Final Judgment.

Authored By:

Christopher A. Pearsall
Attorney-at-Law
70 Dogwood Drive, Suite 304
West Warwick, RI 02893

Call (401) 632-6976 Now for your low-cost consultation.
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Copyright 2008.  Christopher A. Pearsall
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Rhode Island Divorce Lawyers and a regular pension issues!

Are you concerned about your pension in a Rhode Island Divorce situation?  Many people are concerned about their pensions and what will happen to them if the Rhode Island family court judge ends of including the pension in an equitable distribution of the marital estate.

The first consideration is when the pension was started and when the marriage started.  If the pension began after the date of marriage, then the entire pension is part of the marital estate and subject to the Rhode Island Family Court's power of equitable distribution.

Generally speaking, if the pension began but did not become vested before the date of the marriage, then the contributions made prior to the date of marriage are not a marital asset nor is any appreciation that is attributable to those contributions if the pension gains interest on non-vested contributions.

From the marriage date forward, the contributions to the pension and any appreciation relating to those contributions is a marital asset subject to equitable distribution by the Rhode Island family court provided the pension has not vested.

If the pension has vested at the time the divorce is tried by the family court and the entire pension occurred during the course of the marriage, then the payment afforded by the pension then becomes the marital asset that is subject to the court's equitable power of distribution.

If the pension has vested at the time the divorce is tried by the family court and the entire pension did not accumulate with contributions solely during the marriage, then a rather complicated actuarial calculation would need to be done after the court determines the portion of the retirement payment each party is entitled to in order to determine which portion of the payment results from pre-marital contributions and is thus exempt from the equitable distribution of the court.

Since pensions follow a particular plan that participants often have little choice regarding it's accounting method or contributions, it is one of the few exceptions to the concept that the commingling of funds contributed during the marriage convert the entire asset to one that is marital in character.  The contributions to pensions made prior to the marriage remain pre-marital and the contribution of those pre-marital payments to the whole of any pension payment after a pension has vested should remain exempt from the court's power of equitable distribution.

Pension issues can, and often do become the most complicated to work out legally and at trial it may be necessary to present an actuary as an expert to demonstrate the pre-marital contributions and its financial effects on your pension payment of a vested pension.

 

Authored By:

  Christopher A. Pearsall, Esquire
70 Dogwood Drive, Suite 304
West Warwick, RI 02893


Call (401) 632-6976 Now for your low-cost consultation.
from
Rhode Island's Most Affordable Divorce & Family Law* Attorney

Copyright 2008.  Christopher A. Pearsall, Attorney-at-Law

*The Rhode Island Supreme Court licenses all attorneys in the general practice of law.
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