Peoria, AZ High-Net-Worth Divorce Attorneys

Overview

A lot of Peoria estates are built the same way. Two long careers, a paid-down house, and a defined benefit pension that on paper is worth more than everything else combined.

Pensions are also the asset most often mishandled in a settlement, because the number that matters is not the one on the annual statement. Call for a free consultation.

Community or separate

Retirement Benefits and the Community Presumption

Arizona presumes under A.R.S. § 25-211 that what either spouse acquires during the marriage is community property. Retirement benefits are property, so benefits earned during the marriage are community even though nobody has received them yet.

Service credit earned before the wedding is separate under A.R.S. § 25-213, as is anything received by gift or inheritance. That produces the central task in these cases, which is establishing what fraction of the benefit was earned inside the marriage.

At division A.R.S. § 25-318 has the court return each spouse their separate property and divide the community equitably, though not necessarily in kind. With a pension that often means a share of the future payments rather than a cheque today.

Dividing a pension

The Statement Balance Is Not the Marital Share

A defined benefit pension does not have a balance in the way a savings account does. What it has is a future income stream, and its present value depends on assumptions about retirement date, life expectancy and discount rate that reasonable people argue about.

The marital portion is then a fraction of that, based on service earned during the marriage against total service. Get the dates wrong by a year on a thirty year career and the error is real money.

Two things get missed routinely. Survivor benefits, which have to be elected and written into the decree, because a spouse awarded a share of a pension with no survivor election can lose it entirely if the member dies first. And cost of living adjustments, which materially change what the share is worth over twenty years and are frequently ignored at settlement.

Different plans also divide by different mechanisms and on different timetables, so the order that divides the benefit has to match what the specific plan will actually accept. We confirm that with the plan rather than assuming.

If either spouse also has social security in the picture, note that it is not divisible as community property in the way a pension is, though a long marriage can create derivative entitlements worth understanding before you trade anything away for them.

How we work

How We Handle a Peoria Retirement-Heavy Divorce

We have acted for NFL players, professional athletes and public figures, whose retirement arrangements are unusual enough that we long ago stopped assuming any plan works the way the last one did.

For a Peoria client the useful point is narrower. We get the plan documents and the service history before we take a position, we model what each option pays out over time, and we do not sign a decree that a plan administrator will later refuse to implement.

Tax is part of the same calculation. A.R.S. § 25-318 allows the court to consider obligations tied to property including accruing taxes, and pre-tax retirement money is not equal to post-tax cash.