Are Pensions Divisible in Court?

While the question seems simple, the answer is a bit more complicated. Pension plans can be divided based upon the divorce, length of pension plan, and other assets. However, the trial court retains broad discretion in dividing a pension plan between the parties. This discretion goes not only to the valuation of a pension but also to the mechanics of its division.

The court does have broad discretion when dividing property, and their final award can only be speculated. The best bet would be to seek legal council right away for a direct answer. Below are some examples of how pensions have been dealt with in the past. Hopefully it can give you an idea on what could happen.

In the case of Steinke v. Steinke 126 Wis. 2d 372, 376 N.W.2d 839 (1985),[1] the wife had entered into an oral stipulation excluding the husbands pension plan from the marital property division. The court decided to count the pension as income for consideration of maintenance. However, the wife was not satisfied and appealed. The court of appeals affirmed, but the supreme court reversed the decision. This was based on a factor of the 50/50 presumption as well as fair and equitable determination. That was the outcome of this specific case. Yours may or may not have a similar outcome.

In the case Heatwole v. Heatwole 103 Wis.2d 613, 309 N.W.2d 380 (Ct. App. 1981),[2] the court ruled the trial court retains broad discretion in valuing pension rights and in dividing them between the parties. Where a pension fund is comprised in part of non-vested contributions, the trial court must consider all of the circumstances and evaluate the probability that the party has a contingent right to a pension will eventually enjoy that pension.

What is a Vested versus a Non-Vested Pension?

Vested and non vested are terms you will hear. In the case of Heatwole v. Heatwole, 103 Wis. 2d 613, 309 N.W.2d 380 (Ct. App. 1981), the husband's pension was half vested and half non-vested. His personal contribution of $11,000 was considered vested, and his employers contribution of $11,000 was non-vested. The employers contribution was contingent upon several factors, and therefore, were not guaranteed. The trial court considered the full amount of $22,000 as divisible erroneously, and the decision was eventually overturned. The court of appeals reasoned that only $11,000 was to be considered as divisible, and that an individual who has worked toward a pension also has a right to enjoy it. This is one possible scenario, however. A family law attorney will be able to help you obtain a fair, and just settlement.

For pensions invested over a period of time prior to marriage, they may be subject to marital asset division. According to section 767.255 (which explains exclusionary status) (1) acquired by gift, bequest, devise or inheritance, or (2) paid for with funds so acquired, accounts for property or assets which are generally excluded from marital property division. In the case of Rodak v. Rodak 150 Wis. 2d 624, 442 N.W.2d 489 (Ct. App. 1989),[3] the interest in the husband's pension was vested two months after the marriage. The trial court included the pension's full amount in the marital property. The husband appealed, and the court of appeals affirmed.

Can the Court Decide a Payout Option on My Pension?

Your pension might be on the table when it comes to property division. You might be asking why your husband/wife is wondering if they are able to choose a payout option after my retirement. However, shouldn't you be the one who chooses the payout since it is your pension? In Wisconsin the court has full discretion in deciding a property division payout option or in appointing a party to choose.

To illustrate, in the case of Lindsey v. Lindsey 140 Wis. 2d 684, 412 N.W.2d 132 (Ct. App. 1987)[4] the trial court felt it was in error by appointing the wife the decider of the payout option. The wife appealed, and the court of appeals reversed. This is just an example as to how a case like this could play out, though.

Is a Pension Attributed to Work Before a Marriage Divisible?

In all honesty, it will really depend on how the court interprets the law. The court does have discretion over these matters, as long as their decision is based on a reasonable view of the law. A court's discretion can only be deemed an abuse of discretion if they view the law in error.

This is demonstrated in the case of Olson v. Olson 148 Wis. 2d 219, 435 N.W.2d 266 (Ct. App. 1988).[5] In this instance, only 76% of the husband's pension was attributable to work during the marriage. The court included the entire pension in the property division. The husband appealed and the court of appeals reversed.

When Do Courts Consider Pension Plans in Marital Estates?

In Steinke v. Steinke, 126 Wis.2d 372, 376 N.W.2d 839 (1985), it was discussed that courts are more likely to consider pension plans in marital estates when a marriage is longer and both parties have an interest built up for some time.

Is It Possible to Claim in the Event of Death?

The court always maintains discretion on these matters. However, you do have the right to appeal if you do not agree with the court's decision.

To cite a similar situation, we can look to Mausing v. Mausing 146 Wis. 2d 92, 429 N.W.2d 768 (1988).[6] A decision had been reached by the court that, in the event of the death of either party, the wife could not claim her half of the pension. She appealed. Upon certification from the court of appeals, the supreme court reversed the decision. This is one example as to how your case may play out.

Is My Spouse Entitled to My Military Pension Proceeds?

Military Pension Proceeds are considered a divisible marital property under most circumstances. However, how much the other person is entitled to is another story. There are several things the courts will take into consideration when rendering their decision. Because of this, there are numerous ways this case could end.

In the case of Thorpe v. Thorpe, 123 Wis. 2d 424, 367 N.W.2d 233 (Ct. App. 1985),[7] a woman had received 25% of her husband's military pension. This was later set aside, then reinstated as a matter of law. How much a spouse is entitled to will depend the specific case facts and details.

Are Railroad Pensions Reviewable When Deciding a Property Division?

Courts have gone back and forth on this topic for years as to whether or not a railroad pension should be directly or indirectly considered as a part of the value of marital property. In the case of Rommelfanger v. Rommelfanger 114 Wis.2d 175, 337 N.W.2d 851,[8] the court of appeals decided that railroad pensions should not be considered, directly or indirectly, when marital assets are divided. When the trial court divides property, the exercise of discretion is not set-aside on appeal absent of abuse of that discretion. An abuse of discretion occurs when the trial court fails to consider certain factors, makes a mistake in respect to facts that caused division, or provided too much or too little an award to either party. However, since this decision, congress has amended the Railroad Retirement Act to consider annuities as community property while dividing marital property.

References: [1]Steinke v. Steinke (1985), [2]Heatwole v. Heatwole (1981)[3]Rodak v. Rodak, [4]Lindsey v. Lindsey (1987), [5]Olson v. Olson (1988), [6]Mausing v. Mausing (1988), [7]Thorpe v. Thorpe (1985) , [8]Rommelfanger v. Rommelfanger (1983),

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