Maryland uses the rule of equitable distribution when dividing marital property. This means that courts divide property in a way that seems fair, not necessarily equal.
Pensions often count as marital property, at least in part. The portion earned during the marriage can be subject to division.
When is a pension subject to division?
If a spouse earned part or all of a pension while married, the court may give a portion of it to the other spouse. Courts may use a special court order, called a Qualified Domestic Relations Order (QDRO), to carry this out. This order tells the pension plan how to pay the share that belongs to the non-earning spouse. The spouse who earned the pension does not need to give the other spouse a cash payment. Instead, the court can order the plan to divide future benefits.
Maryland courts look at several factors before dividing a pension. These may include the length of the marriage, the financial situation of each spouse, the contributions each spouse made to the marriage and the age or health of both parties. The court may also consider whether one spouse supported the other’s career by staying home or working fewer hours.
A spouse could lose part of a pension even if it is in their name alone. Maryland law does not require both names to be on the account. If it was earned during the marriage, it may still count as marital property.
Are there parts of a pension exempt from division?
Not all of a pension is always marital property. Any part earned before the marriage usually counts as separate property. The same rule applies to parts earned after the couple separates. Only the portion earned during the marriage is typically subject to division.
It is important to prepare for the fact that pensions can be subject to division. A fair outcome depends on full disclosure of all retirement benefits. Courts try to ensure both spouses leave the marriage with a chance to support themselves in the future. Understanding how pensions work in a Maryland divorce can help both parties make informed decisions.
