For law enforcement officers in Minnesota, the financial implications of divorce often take center stage. The division of a pension or retirement account is typically top of mind, though other key financial considerations may include disability payments, insurance coverage and more. What should police officers, peacekeepers and first responders know about this process?
Understand What Is Financially at Stake
Before making the official decision to divorce, take some time to consider your financial future post-divorce. Taking stock of your current financial assets, gathering information and beginning to plan for your future can all help ease the process of divorce. Law enforcement officers may consider questions like the following:
- Will my pension be divided and if so, how?
- How will insurance coverage change?
- How will the payout of any disability benefits be affected?
- How will property and asset division affect my long-term financial goals?
- Is alimony or spousal maintenance likely?
Depending on the length of your marriage, the length of your career and whether children are involved, you may have additional factors to consider.
Retirement Account Considerations
In many cases, law enforcement divorce will involve discussions on dividing a pension, which is one of the biggest financial assets to split in a divorce. In Minnesota, the marital share of pensions and retirement accounts are generally viewed as marital property and subject to the rules of equitable distribution. This means the total marital amount must be divided equitably between spouses. However, the process to divide a pension can be complicated, especially when there are both marital and non-marital interests those accounts.
The Public Employees Retirement Association (PERA) offers guidance on divorce and dividing a PERA pension. Below are some key considerations to take into account:
- All situations are unique. The court may order that your former spouse receives a portion of the pension’s assets or nothing at all. Factors considered include the length of the marriage, how close the divorcing spouses are to retirement age and the current pension value.
- Payments will not be made immediately. Notably, as PERA pension payments are made only when the member retires from public service and applies for their monthly benefits, payments to your former spouse will only begin at that time and will be made on a monthly basis.
- Payments cannot be made without a court order. Without a court order in place, PERA will not begin to divide monthly pension benefits. Once the court order is finalized, you must file this with the court administrator’s office.
Another important consideration is that PERA pensions cannot be divided through Qualified Domestic Relations Orders (QDROs), as other retirement accounts like 401(k)s can. This is because QDROs only apply to private retirement accounts and as such PERA is exempt from QDRO law under ERISA. PERAs can be divided by including appropriate division language in a divorce decree, or by filing a Domestic Relations Order (DRO) with PERA.
Don’t Go Through This Process Alone
When facing a divorce where one or both spouses is in law enforcement, it is critical to seek help from an experienced local divorce attorney. Attorneys in this area understand the nuances of the benefits and can guide clients through the legal system effectively. An attorney can provide necessary guidance on dividing pensions, insurance changes, disability benefit payouts, child custody and more.
Divorce for law enforcement officers involves unique financial considerations where a lot can be at stake. By seeking professional legal help and carefully considering all aspects of property and asset division, you can work toward a healthy and positive financial future post-divorce.