UNDERSTANDING SURVIVOR BENEFITS AFTER DIVORCE

In New York, a spouse generally has strong rights to the marital portion of the other spouse’s pension. The portion of the pensions that was earned during the marriage is as marital property, even though they are deferred and often not payable until years later.

DISCLAIMER: This post contains general legal information for educational purposes only and does not constitute legal advice and does not provide tax advice. This content does not create an attorney-client relationship. You should not act on any information here without seeking advice from a qualified matrimonial attorney licensed in New York State.

The Core Rule in NY

Under Domestic Relations Law § 236(B): Any portion of a pension earned during the marriage is marital property, regardless of whose name it is in or whether it is vested.

What pensions are included:  in my practice I have had clients with traditional pensions known as defined benefit plans, defined contribution plans including (401(k), 403(b), and others, government pensions, teachers pensions, military and public employee pensions.

What the Non-Employee Spouse Is Entitled To

The Marital Portion is determined to that part of the pension that was earned between the date of marriage and the cutoff date (usually commencement of the divorce action or in mediation the “Cut-Off Date” )  is marital.

The Majauskas formula is used in New York divorces to determine the marital portion of a pension, typically calculated as: 

The marital portion is then equitably divided usually 50/50, but not automatically.

Survivor Benefits Matter

The employee spouse must elect pre-retirement survivor benefits and post-retirement survivor annuity.  The preretirement survivor benefit pays a survivor benefit to the designated beneficiary if the employee spouse dies first.  Why is this important?  While married the designated beneficiary is the spouse, upon divorce, the spouse loses that right. Thus the need for the affirmative election.

Post-Retirement Survivor Benefits applies when the employee spouse dies after retirement has begun. Upon retirement the employee spouse chooses a payment option and that choice is usually irrevocable.  In a divorce, the preferred option would be the Joint & Survivor Annuity which is usually a lower monthly payment however, the pension benefits continue to the survivor.

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