When couples separate, there is sometimes a rush to settle issues arising from the breakdown of their relationship.
Regardless of how urgent it may seem to establish an agreement with respect to these issues, it is important to consider which assets owned by either party or both parties are "family assets," and thus subject to division, and what each party's interest in those "family assets" might be.
One such asset that is often overlooked or undervalued is one party's pension. It is increasingly the case that peoples' pensions, rather than their homes, are their most valuable asset.
Even if retirement seems distant into the future, it is important to consider the value of a party's pension in making a separation agreement because, under the law, a spouse is entitled to a portion of any pension which has accumulated during the parties' relationship.
A pension is basically an income stream that the beneficiary will receive upon becoming eligible to receive the pension benefit. Some pension benefits are contingent on the contributions that are made and other pension benefits are based upon a fixed formula (e.g., a flat benefit, career average of earnings, or average earnings over the person's last few years of service).
In either case, before a pension a decision is made to disregard one party's pension or waive an interest in it, it is important to gather certain information.
Annual Pension Statements should be reviewed and consideration should be given to length of the parties' relationship. The longer the parties' relationship is and the longer the pension has been accumulating during the parties' relationship, the larger a party's entitlement may be to share in their spouse's pension benefits.
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