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Will the courts split up your auto industry pension in a divorce?

For many decades, Detroit's auto industry led the way in terms of wages and benefits for blue collar workers. Workers not only made competitive wages compared to other manufacturing jobs, they also secured excellent health and dental insurance, as well as paid time off and an employer-sponsored pension program. For a long time, these jobs and their benefits were some of the most sought-after in the region.

During the Great Recession, many of the major automotive unions renegotiated compensation and benefits to prevent the further outsourcing of domestic jobs. Some retirees or those approaching retirement agreed to reduced pension benefits or carrying more costs associated with health care as part of those negotiations. If you've already taken a reduction in your pension and you're looking at a divorce, you may worry about whether you'll need to split those benefits with your spouse.

Do you understand how Michigan courts divide assets?

If you don't have a prenuptial agreement and you can't agree with your ex about terms for your divorce, you will very likely have to ask the courts to make critical decisions for you. It's common for couples to disagree about how to fairly split up their assets and debts when facing a divorce. If you understand how Michigan family law guides the asset division process, you will better understand the potential outcomes of your divorce.

Michigan is an equitable division state. In other words, Michigan courts look at your incomes, your assets and debts and several other factors when determining how to divide what you own and owe in a fair manner. Typically, the courts consider any debts or assets acquired during marriage to be marital property and thus subject to division.

Your pension could very well be marital property

Even if your name is the only one on your pension and your spouse never directly contributed to your retirement fund, you could end up spitting it. The courts will look at when you and your employer made deposits into the account. Deposits from before your marriage, as well as interest on those deposits, will typically remain separate property and will not end up split. However, any amount you accrued during marriage could end up divided in your divorce.

Even if your spouse never worked, he or she contributed to your household via unpaid work in the home. The courts will consider that, as well as his or her ability to earn an income, when dividing your assets, including your pension. They may order you to split the actual pension benefits or may simply offset the value of the pension by allocating other assets to your spouse. However, in many cases, pensions and retirement accounts will get split or shared in a Michigan divorce.

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Lorrie J. Zahodnic

"I will hold you up until you can stand on your own two feet."

Lorrie J. Zahodnic, P.C. has provided skilled and compassionate legal guidance to Michiganders in family law matters for over 20 years.

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