Pension plans can be a key component of many Minnesota resident’s retirement plans. It can be a significant source of income, both for the testator and for their beneficiaries as well. However, a divorce can cast a cloud on the benefits of a pension plan. If the plan is listed as a marital asset, then a Minnesota court will probably divide these benefits as part of a divorce settlement. Here are some basic facts on how pension plans are viewed by a Minnesota court.
It’s important to remember that any pension plan that is part of a divorce will only be able to pay out the maximum amount of benefits, whatever that dollar amount is. Basically, that means that just because a couple got divorced does not mean that the pension plan will suddenly pay out more funds for two or more people than it would for just one. Pension plans usually have finite amounts of benefits and a divorce doesn’t change that.
Another significant fact about pension plans is that the benefits of that plan cannot be paid out in a lump sum amount. That means that if the pension plan is split up among the two spouses, one or both of them cannot receive their benefits all at once because of the divorce. The divorce does not change the conditions of the pension plan.
The benefits timeline for a pension plan cannot be altered by a divorce. However, any Minnesota resident who has a pension plan and is going through a divorce may want to speak to a family law attorney in order to discover how their plan may potentially be divided.
Source: hg.org, “Minnesota Divorce Law,” Accessed March 13, 2016