Pension equalisation – what happens to the pension in the event of divorce

Pension equalisation only becomes an issue when you get divorced, because both partners want to be secure for their old age after the divorce. However, how is this pension equalisation distributed, who benefits from it and how fair is it really?

The facts – who benefits from pension equalisation?

People who work acquire pension entitlements for old age in different ways. While employees are usually compulsorily insured with the German pension insurance, civil servants are entitled to a civil servant pension and self-employed people ideally provide for their old age on their own responsibility.

In the event of divorce, the equalisation of p ensions ensures that the spouse benefiting from it is able to provide for his or her own retirement independently of the other partner. Originally, the legislator had the housewife marriage in mind with this claim, in which the wife looks after the joint children and therefore foregoes her own income and savings for old age. In the case of pension rights equalisation, the pension rights acquired during the marriage are therefore divided equally between the partners. However, this entitlement does not apply to non-married and non-marital partners, as in these relationships each person remains responsible for his or her own pension.

• Everyone who works acquires pension rights for old age
• In the event of a divorce, the provision for old age must be regulated for both partners, which is regulated by the pension equalisation scheme.

Which pension entitlements are included? – Pension & Co.

The figures make it clear how important pension equalisation is, because in 2011 more than 716,000 retired people benefited from pension equalisation and supplemented their pensions with an average of 210 euros per month by transferring the pension entitlements of their ex-partner. But which pension entitlements are included in the pension rights adjustment at all? The law stipulates that all pension benefits acquired by a spouse through employment during the marriage are included in the pension equalization. However, benefits that are of a compensatory nature, such as pensions from accident insurance or life insurance, are not eligible for equalisation.

• The pension belongs to the entitlements that are regulated within the framework of the pension rights adjustment.
• Not eligible for compensation are benefits that have a compensatory character

Avoiding pension rights adjustment – is this possible?

Pension equalisation is not always fair and is therefore not applied in certain cases. If the marriage lasts less than three years, if the equalisation value is less than 50 euros per month or if the pension difference is only about 25 euros per month or less, pension equalisation is not considered necessary.

However, if none of the above points apply, pension equalisation can also be prevented in another way. Anyone who has excluded pension equalisation in a notarised marriage contract avoids pension equalisation proceedings in the event of divorce. However, such an agreement can still be concluded during the divorce as long as the spouses are both financially secure for old age and agree to the agreement. However, a pension equalisation can also be avoided by combining it with the equalisation of gains pending on divorce. Here, for example, a property can be transferred for old-age provision, provided that the family court considers this agreement to be appropriate.

• Pension rights adjustment is not necessary in certain cases
• The pension equalisation can also be excluded by a notarised agreement.

Conclusion on pension equalisation – this is how important the regulation is for married couples

At first glance, the pension equalization is fair for both parties, but in practice it shows only problems with which the spouses have to struggle. It becomes particularly problematic for married couples who only divorce at an advanced age. Where both partners together were well provided for in old age, they often find themselves with only two poor households after the divorce. If a divorce is finalized at a young age, both parties still have the opportunity to supplement their pensions as they continue to work, while older couples often face financial ruin. So instead of a schematic division, it can often be more beneficial for older couples if one party keeps the pension rights and exchanges them for other assets, such as a property. So the legislation here is not entirely optimal, as it does not offer everyone the same opportunities and can be particularly difficult for older couples by necessity.

• The pension equalization actually regulates the provision in old age fairly, but does not take into account the disadvantage that some groups draw from it
• Older spouses in particular are not favoured by pension equalisation

The most important questions about pensions after divorce

When it comes to divorce and pensions, many questions arise. The equalization of pensions and the fair provision in old age for both parties is an important topic. To ensure that no questions remain unanswered for you, the experts at Lukinski answer all important questions on the subject of divorce and pensions.

What is the pension equalization in divorce?

The pension equalisation deals with all entitlements to a pension in old age acquired during the marriage. It is therefore about the pension and how it is divided between the spouses.

How fast is a divorce?

The length of a divorce depends first of all on whether the divorce is contested or amicable. Amicable divorces usually take between three and six months, while contested divorces can be delayed for up to a year.

What are the costs of divorce?

The cost of a divorce varies from case to case. The court determines much of the cost, which also depends on how many lawyers are needed and how long the divorce takes.

Who pays for the divorce?

Normally, the costs are offset against each other. This means that each party pays its own lawyer and half of the court costs incurred.

What is gain in marriage?

A gain describes an increase in assets that occurred during the marriage. At the end of the marriage, this must be calculated for the mutual equalisation of gains.

How long does it take to process the pension rights adjustment?

A divorce in which the pension equalization is omitted usually takes no longer than four months. Divorces where the pension equalisation is observed take between five and nine months.

Can the divorce be denied?

Divorce can be refused by the spouse in principle. However, this is not possible on a permanent basis, as a compulsory divorce can be decided by the court after three years at the latest.

Divorce: guide, help and tips

Divorce is complex, it’s true. But you are not alone! Many let themselves separate and in fact, a large part always finds a good solution. Only a small part ends in a quarrel. So that you can prepare well, you will find here our small guides and tips on divorce, family, money and real estate.

• Divorce: Guide

Der Beitrag Pension entitlement divorce: Company pension, remarriage and pension equalisation – is half gone? erschien zuerst auf ℄ Real Estates.

Child support and spousal support – the rules according to the law

The question of maintenance after a divorce is often not easy to clarify, especially if joint children are part of the marriage. Maintenance claims for the children can be asserted by the parent who looks after the children, but what about one’s own maintenance claims? When can claims for maintenance be asserted and when do they have to be paid and when not?

The conditions – strict rules after the divorce

In the period between separation and official divorce, there is a separation maintenance. This can be claimed by the spouse who earns less. However, if the divorce is final, other rules apply. In principle, both spouses should be able to support themselves after the divorce, but in practice this is rarely the case. In certain cases, there is a claim for maintenance. These include the care of the joint children, claims arising from old age, illness / infirmity or unemployment, but also top-up maintenance, educational maintenance and maintenance on grounds of equity.

Another requirement that arises according to the law is that the spouse who demands alimony must be needy and have a reason for demanding alimony. The spouse who is to pay alimony, however, must also be capable of performing, i.e. also be able to raise the alimony claim. In addition, the longer the marriage has lasted, the more likely there is to be a claim for maintenance.

• The spouse requesting maintenance must be needy and the spouse paying maintenance must be able to pay.
• A reason for maintenance must exist, otherwise no maintenance can be claimed

Who gets alimony and who has to pay it?

Maintenance is only paid to those who are in need. This means not being able to support themselves from their own income and assets. However, the spouse in need must actively try to find a suitable gainful employment in order to claim maintenance. It is considered reasonable if it is commensurate with education, age, ability, and health conditions. If the spouse receiving maintenance moves in with a new partner, the claim to maintenance may lapse in accordance with § 1579 no. 2 BGB.

Maintenance is only paid by the person who is able to pay. This means being able to pay alimony without jeopardizing his or her own reasonable livelihood. The spouse paying alimony must therefore always have a deductible remaining. According to the Düsseldorfer Tabelle, the monthly personal requirement without personal requirement amounts to 1,200 euros.

• The needy spouse may receive alimony if he or she cannot support himself or herself
• The capable spouse must support the other through alimony if it is possible for him/her to do so

Tips from the lawyer – video

The grounds for maintenance – care, supplementary and old-age maintenance

Maintenance can only be claimed after the divorce if one of the grounds for maintenance exists at the time of the divorce. If this only arises later, no maintenance can be claimed.

The maintenance

Childcare maintenance can be levied on the parent who has to look after children under the age of three after the divorce. According to the law, it is not reasonable to go to work in this context. Even if a daycare center or grandparents are available to provide partial care, the parent may choose to stay home. If the children are older than three years, the parent can be required to go back to work. Part-time work is absolutely permissible in this case in order to ensure sufficient care for the children.
In certain cases, however, there is still a claim here after the age of three. In the event of problems at school or illnesses of the child, childcare maintenance can also be claimed later. This is usually decided on a case-by-case basis.

Maintenance due to illness

If one of the ex-spouses is no longer capable of gainful employment due to illness, he or she may claim maintenance from the partner on the grounds of illness. The exact extent depends in detail on the type and extent of the health impairment. In any case, however, the illness must be documented by means of a medical certificate.

Supplementary maintenance

If the spouse who is obliged to pay maintenance has a higher and for the marriage formative income, a so-called top-up maintenance can become due from the partner. In order to claim this, one’s own income may not be sufficient to maintain the living conditions. The top-up maintenance is regulated in such a way that it is supplementary to further claims for post-marital maintenance, i.e. the difference is made up by the better-earning partner.

Unemployment benefit

A spouse who is unable to find suitable gainful employment after divorce may claim maintenance. However, such a claim can only be made if no maintenance for care or maintenance due to illness or old age is claimed. In addition, it must be proven that the person concerned has made a serious effort to find a job.

Old age maintenance

If an ex-spouse cannot find a job because of age, he or she can claim maintenance. What age is considered appropriate for this varies from case to case, but usually amounts to the standard age limits for statutory pensions. Younger people can also claim this maintenance by proving that they cannot find adequate work in the possible occupational fields due to their age.

Maintenance in equity

According to the law, it is also possible to demand maintenance if there are serious reasons for not being able to carry out gainful employment and it would be grossly inequitable not to receive maintenance. Precise guidelines as to when such a case occurs are not given and are decided differently from case to case.

Education maintenance

If an education was discontinued or not taken up in anticipation of the marriage, the spouse has the possibility to take up the education again after the marriage or to start it and to claim maintenance during the education. However, the education in this case should be necessary to obtain a suitable job. However, the duration of alimony is limited to the average duration of education.

The amount – so much alimony is entitled to the spouse

The amount of post-marital maintenance is always determined equally by both spouses. First, the income relevant for maintenance is calculated. From the gross income, taxes, social security contributions, reasonable professional applications of a flat rate of 5% and actual expenses for retirement provisions of up to 23% of the gross income are deducted. If the spouse pays child support, this must also be deducted. Of this value, a lump sum of three sevenths, i.e. just under 43%, is deducted as post-marital maintenance if the other is not gainfully employed. However, the person obligated to pay maintenance must be allowed to keep a minimum amount of 1200 euros as a deductible.

• The amount is always calculated in the same way for both separation and spousal maintenance
• Certain liabilities are deducted from the net income and from this the claim arises

The duration – so long must be paid alimony

There is no exact regulation in the law as to how long post-marital maintenance must be paid. In principle, however, there is no lifelong entitlement to maintenance. After the divorce, it is possible to limit the payments in time or to reduce them to zero, but only if it is just and equitable, which is checked by the family court in case of doubt. The determining factor for time limits on alimony is whether the dependent partner has suffered any disadvantages as a result of the marriage, such as a career setback due to caring for their children together or a low pension. Marriages that have lasted longer than 20 years often receive an unlimited maintenance claim.

• The duration is not clearly regulated in the law
• Depending on the duration and course of the marriage, there are different arrangements

The most important questions about alimony after divorce

The question of the financial situation after a divorce is always a topic of conversation. To avoid disputes arising from this matter, it is important to know the legal situation and the rights. Therefore, the experts of Lukinski answer all important questions about the topic of alimony after divorce.

How is post-marital maintenance calculated?

Post-marital maintenance is calculated from the gross income of both spouses, taking into account certain liabilities. Depending on the reason for maintenance, a different maintenance claim arises. The exact sums must be calculated individually in each case.

When do I have to pay alimony to my wife?

In short marriages (usually of two years or less), no alimony arises for the wife. In longer marriages, maintenance must be paid if one or more of the grounds for maintenance can be invoked. However, this varies greatly from case to case.

How long can a divorce drag on?

Divorces by mutual consent with pension rights adjustment are scheduled for a period of between four and six months. Without pension equalization, an amicable divorce is shortened to one to three months. However, if the spouses do not agree, divorces can drag on for a year or longer, depending on how quickly an agreement is reached.

How long do you have to pay separation maintenance?

Separation maintenance only has to be paid until the divorce is official. Separation maintenance is therefore limited to a period between separation and divorce.

What is spousal support?

Spousal maintenance is a transfer payment that must be paid by the higher-earning spouse during the separation and beyond the end of the marriage period. Spousal maintenance is regulated in the BGB.

Family law: divorce, separation year, lawyer and costs – Video

Divorce: children, house and procedure – Guidebook

Facts: Children, expiry and maintenance

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• Pension entitlement
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• Divorce Procedure
• Divorce settlement
• Divorce Law
• Maintenance

Life: Reasons, separation year and name change

• Living apart
• Name change
• Grounds for Divorce
• Separation year

Selling house, apartment building and condominium:

• Sell apartment
• Sell house
• In the middle of a divorce? Sell house quickly

Der Beitrag Alimony divorce: children, duration, calculate and tax – How long do I pay? erschien zuerst auf ℄ Real Estates.

The allowances of inheritance – what is taxed and what is not?

In order to protect the heirs from a large financial burden, different tax rates and allowances apply depending on the degree of relationship. These allowances include various things that do not have to be taxed, so that the heirs do not have to pay the most as taxes, especially in the case of a large estate. You can now find out what the tax-free amounts are and how high they are for the respective family members.

• Life estate: bequeathing correctly
• Learn more about: Inherit properly

Pension allowances – precisely regulated for children and spouses

Pension allowances are payable if the partner or children were dependent on the financial support of the deceased. For spouses, the pension allowance is €256,000 provided that the surviving spouse does not have a widow’s pension or occupational pension for which no inheritance tax is payable. If such a pension exists, the value of the pension is determined on the basis of the expected duration of the benefits and the pension allowance is reduced by this value.

Children are entitled to pension allowances that are graduated according to the age of the child at the time of death. Infants up to the age of 5 are entitled to a pension allowance of 52,000 euros. Starting from this point, the pension allowance decreases by approximately 10,000 euros every five years. Children aged 20 to 27 can therefore claim a pension allowance of 10,300 euros, but these allowances are only relevant if the children do not have their own pension payments, such as an orphan’s pension.

• Pension allowances apply if the partner or children were dependent on the deceased’s financial support
• Spouses and registered partners receive 256,000 euros
• Children receive 52,000 euros, but the amount is reduced under certain conditions

Inheritance tax: clever use of allowances – tips from a specialist lawyer

Further allowances – different according to degree of relationship

The other allowances, in addition to the pension allowances, are regulated according to the degree of relationship and are independent of existing survivors’ pensions or own assets. Accordingly, spouses and registered partners inherit an allowance of 500,000 euros. Children of the deceased or grandchildren of the deceased, if their parents die before the inheritance, can claim an allowance of 400,000 euros. Grandchildren whose parents are still alive can claim an allowance of 200,000 euros. Great-grandchildren or the deceased’s own parents are entitled to an allowance of 100,000 euros. All other heirs can claim tax allowances of 20,000 euros. To ensure that as little tax as possible has to be paid on inheritance, the testator can make important decisions long before death and specify them in the will.

Only what remains of the estate after deducting the allowances is taxable. Each taxable acquisition is rounded down to a full €100. The individual tax rates of inheritance tax depend on the different tax classes of the heirs and are also progressively graduated.

• There are other allowances that apply to both inheritance and gifting
• The free allowances are based on the degree of relationship

Gifts – allowances and gift tax

Inheritance tax and gift tax are closely linked. Almost the same allowances apply as in the case of inheritance, however, the gift allowances may only be left tax-free once in ten years. Testators who wish to reduce the inheritance tax for their heirs must therefore start gifting their assets ten years before their death. In the case of patchwork families, this rule means that it can make sense to adopt the spouse’s children in order to bring the tax-free amounts into line with those of the biological children. The adoption does not affect the succession to the other biological parent.

A gift thus actually allows for savings opportunities in inheritance tax. The testators must be aware of these possibilities and use them in a targeted manner in order to have to hand over less of an estate in taxes. Non-marital partners must note that even long-term civil partnerships only allow the given tax allowances if they are officially recognised, either through marriage or through registration of the partnership.

• The same allowances apply to gift tax as to inheritance tax.
• The two are closely linked and follow the same premises

Tax-exempt goods – works of art, libraries or household effects

In addition to tax-free allowances, there are also goods that are tax-free. For close relatives in tax class I, movable assets such as household effects or similar objects of daily use are tax-exempt if they do not exceed a value of 42,000 euros. For all other heirs, a value of 12,000 euros applies here. If works of art, archives or libraries are part of the estate, they are generally exempt from tax at a rate of 60 percent. If the estate includes a building in which one of the heirs lives, this can also be exempt from tax.

• Some goods are tax free or tax exempt up to a certain amount
• Archives, works of art and libraries are 60 percent tax-exempt

You can also find out more about the topic: Bequeathing correctly during your lifetime!

The most important questions on the subject of tax allowances and inheritance tax

Since the allowances vary depending on the degree of relationship and also depend on the succession, questions often arise on this topic. So that you know which allowance you are entitled to and how much inheritance tax is due, the experts at Lukinski answer all the important questions on the subject of allowances and inheritance tax.

What is the allowance for inheritance tax?

The tax-free amounts vary depending on the degree of relationship. For spouses and civil partners, an amount of 500,000 euros applies, for children and grandchildren, if their parents are already deceased, an amount of 400,000 euros applies. For grandchildren whose parents are still alive, an amount of 200,000 euros applies and for parents and grandparents an amount of 100,000 euros applies.

What is the allowance for inheritance between siblings?

In the case of inheritance among siblings, an allowance of 20,000 euros applies. The heirs are subject to tax class 2.

How can I avoid the inheritance tax?

The inheritance tax can be reduced by the testator already starting to give away his inheritance during his lifetime. Here, some guidelines must be followed so that no gift tax is incurred. If everything is observed, the inheritance tax can be reduced by the gift and, depending on the case, can even be completely omitted.

When do I pay inheritance tax?

Inheritance tax is paid by every heir. However, tax is only levied on the amount that exceeds the exempt amount. The possible tax-free amount varies depending on the degree of relationship.

Is a gift taxable?

Gift tax is very close to inheritance tax. In general, a gift must be taxed in the same way as an inheritance, but the same allowances apply here. Testators can therefore minimise inheritance tax by making a gift during their lifetime.

Until when is an inheritance tax-free?

This depends on the degree of kinship. Close relatives such as spouses and children have a higher allowance than grandchildren, parents or grandparents of the deceased.

How much is the inheritance tax?

The amount of inheritance tax depends on the degree of relationship, the amount of the estate but also on the respective allowances. How high the inheritance tax is in each individual case must be calculated individually.

Der Beitrag Allowances and inheritance tax: facts and tips erschien zuerst auf ℄ Real Estates.