Divorce and pension plans

[shelbydutch]

What is the name of your state? Indiana

I am considering divorcing my husband. He has a pension plan that I am beneficiary of. Due to a serious medical condition, I am going to ask for my portion of this pension plan now. It would benefit me and my children more now then when he retires. Is this possible?

[LdiJ]

Originally Posted by shelbydutch

What is the name of your state? Indiana

I am considering divorcing my husband. He has a pension plan that I am beneficiary of. Due to a serious medical condition, I am going to ask for my portion of this pension plan now. It would benefit me and my children more now then when he retires. Is this possible?

Once the pension plan has actually been divided yes, you have the option of early withdrawal. However be aware that there are tax consequences. You would have to pay normal income tax on the portion withdrawn, plus a 10% penalty. Your medical condition however, may help you qualify to have the penalty excluded....or to have part of the funds excluded from the penalty.
You would also not have to draw all the funds out in the same calendar year...which could help on the taxes.

Another option would be to structure the property settlement so that your husband keeps his retirement fund, but you get a greater share of the other assets. That might give you the help that you need now, without the tax bite.

[shelbydutch]

Thank you for your reply, LDJ. Questions: What do you mean by "Once the pension plan has actually been divided"? It states in the plan that the spouse gets half. I do understand the tax consequenses and I need to take that risk. The other assets were considered but I don't have that much time!

[shelbydutch]

I again want to thank LDJ for their reply. I was always under the understanding that forums were for people to seek help and/or give their opinions and/or help when needed. I have been told that I cannot do that in someone else's post here. For that, I am sorry but I don't understand. I have found that in doing this helps keep post going and might even help find the answer someone needs. So I am also posting here on my own post something else that I need help with. I am dying of cancer. I need to take care of my children and make sure that I have the means to do so. Because of this, I need to file for bankruptcy so that neither they nor my husband is responsible for my debt. I need his pension to continue with my cancer treatment and care of my children, etc. but I do not want any of them to have to pay for my debts. My hiusband's name is not on these debts (credit cards, of course) and I want to know if I can, 1) Receive my portion of my husband's pension now for my use and 2) If I can file bankruptcy on my debts to keep him or my children from paying for them. Thank you, in advance, to anyone that has help and/or an opinion. Also, I do not have a problem with someone continuing this post if it will help them.

[LdiJ]

Originally Posted by shelbydutch

I again want to thank LDJ for their reply. I was always under the understanding that forums were for people to seek help and/or give their opinions and/or help when needed. I have been told that I cannot do that in someone else's post here. For that, I am sorry but I don't understand. I have found that in doing this helps keep post going and might even help find the answer someone needs. So I am also posting here on my own post something else that I need help with. I am dying of cancer. I need to take care of my children and make sure that I have the means to do so. Because of this, I need to file for bankruptcy so that neither they nor my husband is responsible for my debt. I need his pension to continue with my cancer treatment and care of my children, etc. but I do not want any of them to have to pay for my debts. My hiusband's name is not on these debts (credit cards, of course) and I want to know if I can, 1) Receive my portion of my husband's pension now for my use and 2) If I can file bankruptcy on my debts to keep him or my children from paying for them. Thank you, in advance, to anyone that has help and/or an opinion. Also, I do not have a problem with someone continuing this post if it will help them.

You can do both of these things but it gets quite complicated financially and legally.

Money in a retirement account cannot be taken in a bankruptcy. Money that is removed from the retirement account can.

If your husband simply removes the money from the account and gives it to you, the tax liability becomes his. Therefore the account has to be legally divided, and you really need an attorney to do that properly, and it takes time.

If you are on the home mortgage, or have any joint assets or liabilities with your husband, it could also complicate his life if you file bankruptcy.

Therefore, I truly recommend that you get a consult with a bankruptcy attorney and a family law attorney regarding your debts and your plans, to see what is the best way to proceed.