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pension survivorship

Navigating Pension Survivorship Options During Divorce

Divorce can be a challenging and emotionally charged process, especially when dividing financial
assets such as pensions. One important aspect to consider is the selection of a survivorship option
for a pension during divorce proceedings. This decision can significantly impact the financial well-being of both parties involved. In this blog post, we will discuss what pension survivorship options
are, their importance in a divorce, and how to choose the right option for your situation.

What is a Pension?

A pension is a retirement plan offered by employers that provides regular income to employees
after they retire. Upon retirement, the employee receives regular payments based on their
earnings and years of service. Pensions can vary widely in their structure and benefits, so it’s
important to understand the specific terms and options associated with your pension plan to
make informed decisions during a divorce. Additionally, the treatment of pensions in divorce
proceedings can depend on state laws and the specific circumstances of the marriage, so it’s
important to consult with legal and financial experts. That said, the most common manner to
divide a pension during a divorce is to split the pension equally between both spouses.

What Are Pension Survivorship Options?

Pension survivorship options determine how pension benefits are distributed upon the death of the
pension holder. In general, there are a few common types of pension survivorship options:
Single Life Annuity: The pension holder receives a fixed monthly benefit for life, but benefits cease
upon death, leaving no further payments to beneficiaries. This means that if your spouse earned the
pension, your pension payment will stop when they die. This could pose a great risk to you.
Joint and Survivor Annuity: The pension holder receives a reduced monthly benefit to provide
continued payments to a designated beneficiary (usually a spouse) upon their death. The
beneficiary continues receiving payments for their lifetime, either at the same rate as the pension
holder or at a specified reduced rate. This is the option that we typically recommend so the surviving
spouse can continue to receive benefits when the other spouse passes away.

The Importance of Choosing the Right Option During Divorce

When going through a divorce, pension assets may be subject to division between the spouses.
This can have a significant impact on the financial security of both parties. Choosing the right
survivorship option for a pension during the divorce process is crucial for several reasons:
Future Financial Security: Selecting the right option can provide ongoing income to the surviving exspouse, securing their future financial stability.
Fair Asset Division: It ensures an equitable distribution of pension benefits between the spouses,
reflecting their contributions and needs.

How to Choose the Right Survivorship Option?

Choosing the right pension survivorship option during a divorce can be complex, but the following
steps can help guide your decision:
Assess Both Parties’ Financial Needs: Consider the income needs and financial stability of both
parties. Evaluate the current and future income sources, expenses, and financial goals.
Evaluate Pension Options: Review the available pension options and their impact on future income,
including potential benefits for beneficiaries.
Seek Legal and Financial Advice: Consult with a divorce attorney and a Certified Divorce Financial
An analyst who specializes in pension plans and asset division during divorce to understand your rights
and obligations.
Review Divorce Settlement Agreements: Make sure the chosen option aligns with any stipulations
outlined in the divorce settlement agreement. This is really important and often overlooked!
Consider Long-Term Impact: Consider the long-term impact of your decision on both party’s
financial well-being, including potential changes in circumstances such as remarriage or changes
in income.
Document Decisions: Ensure that any decisions made regarding pension division and survivorship
options are documented in the divorce settlement agreement.


Choosing the right pension survivorship option during a divorce is a critical decision that requires
careful consideration of both parties’ financial needs and goals. Seeking professional advice and
understanding the options available can help you make an informed choice that supports your
long-term financial security. By addressing this aspect thoughtfully, you can navigate this complex
process with greater confidence and clarity.

Any opinions are those of Purposeful Wealth Advisors and not necessarily those of Raymond
James. The foregoing information has been obtained from sources considered to be reliable,
but we do not guarantee that it is accurate or complete. Raymond James and its advisors do
not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate