All divorces require spouses to divide their marital assets, regardless of how small or substantial they may be. This includes real estate, vehicles, jewelry, household items, and a variety of other types of personal property. One of the most valuable assets that may need to be considered are retirement funds that were accumulated during the marriage.
Typically, retirement accounts and pensions are divided between the divorcing spouses. Florida follows an “equitable distribution” method, which means that the court will make a just and fair division of the marital assets. It does not mean that the division will be 50/50.
It is also important to understand that the full value of the retirement plan or pension may not be considered marital property and subject to division. In other words, only the amount of the plan that was earned while the couple was married is subject to division. The court must consider different factors to determine what amount was earned during the marriage. Below are a few factors that a court typically considers in dividing marital assets, including retirement accounts:
- How long the couple was married
- The overall economic situation of each party
- The contributions of each spouse to the marriage, which includes contributions that improved marital or non-marital property
- The debts of each spouse
If retirement benefits will be divided in your divorce, a Qualified Domestic Relations Order (QDRO) must be prepared. This is an order that sets forth an ex-spouse’s legal right to receive a specified amount of a qualifying retirement plan’s balance or benefit payments. It also instructs the administrator of the retirement plan to make the payments accordingly. It is imperative that you work with an attorney that is experienced in handling QDRO’s, because there can be substantial tax consequences if it is not prepared correctly.