pensions

When lawyers say you should never represent yourself, even in so called, “simple” cases,  they are often accused of being greedy, driving up fees, and unwilling to acknowledge that there are smart people out there that are capable of working out the terms of a settlement.  I have recently been involved in a case which has been really bothering me. It is the perfect example of an intelligent, thoughtful, detailed oriented individual who believed he knew what he was agreeing to twenty three years ago when he was divorced and now finds himself in a position where a trial court has interpreted his divorce settlement agreement far differently than he did back then.

 In my case, my client did not have an attorney at the time that he was divorced .  He and his wife were able to reach an amicable agreement as to the terms of their divorce and she hired a layer to draft the agreement and put the divorce through.  When they got the issue of my client’s retirement benefits, he agreed to language which he thought would limit his ex-wife’s share of his retirement. Unfortunately, he did not have his own counsel to inform him of what is often referred to the “marital foundation” theory, which essentially means that as a result of the foundation that is built in the early part of employment ( which usually occurs during the marriage), a former spouse will be entitled to the benefit of  some post marital efforts.

 

Usually, a former spouse’s entitlement to a retiree’s pension is calculated by use of what is known as a “coverture” fraction. In its simplest form, the coverture fraction is one in which the numerator is the number of years or months that the employee worked during the marriage and the denominator is the total number of months or years worked. That fraction is then multiplied by the percentage of which the former spouse is entitled ( usually 50%). The resulting number is the actual percentage of the pension payment that the former spouse will receive.  This fraction is used for several reasons. First, as I have previously stated, the theory is that during the marriage, a foundation is built which allows the working spouse to advance in later years. Second is the reality that this is a mathematical way to segregate out the marital portion. It is not, however, a perfect science given the way that the majority of pensions are calculated.  The end result is often that the former spouse shares to some extent in a pension benefit that is calculated based upon a higher salary which was earned after the divorce.

 

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