Pensions and Divorce in Arizona

Q: Are pensions divided in a divorce?

If you’re considering getting divorced in Arizona, you will have many issues to work out as you untie the knot. Some common examples include spousal support, if any, and working out legal decision-making and parenting time arrangements and child support for any minor children. At a minimum, all couples must divide their marital property. 

Certain property, especially if tangible, is easier to divvy-up than other property. For example, it’s easier to decide who gets the crock pot and the sofa than it is to divide a pension

Not only do state laws differ with respect to how marital property is divided when a couple divorces, but because of differences in the types of pension or retirement plans, and because contributions may pre-date the marriage, it’s not always easy to apply the state law in a particular couple’s situation. 

The majority of states are equitable distribution states which divide marital property in an equitable manner–which means fairly, but not necessarily a 50/50 split. Arizona however, is one of a handful of community property states. In a community property state, a couple’s marital property is divided as close to 50/50 as possible.

When dividing marital property, the court considers what the couple owned prior to their marriage as being their individual separate property and any property acquired during the marriage to be the couple’s community property. Sometimes, couples may mingle what would have been their separate property, thereby losing that distinction. 

With respect to pensions and other retirement accounts, Arizona courts generally consider them to be community property subject to a 50/50 split, but will consider any portion earned before the marriage to be the spouse-employee’s separate property. If a retirement account is going to be divided up due to a divorce and a portion transferred to the non-employee spouse, a special court order called a “qualified domestic relations order” or “QDRO” is required. 

If agreeable to both parties, in an effort to avoid invading the retirement plan, a non-employee spouse may accept other assets equal in value to what they would have received through the pension. 

Contact Cohen Family Law Today

If you need assistance filing for divorce, have been served with divorce papers, or have any other questions, our Arizona divorce attorneys at Cohen Family Law can help you. Contact us today for a free consultation. 

From our office in Phoenix, we routinely handle all aspects of family law for clients throughout Arizona and pride ourselves on offering compassionate, affordable, and personalized legal representation during our clients’ most challenging times.