Dividing Retirement Plans and Pensions in Your Florida Divorce
One essential part of getting divorced is dividing the marital assets or property between the two spouses. Marital property generally is any sort of property – bank accounts, real estate, retirement plans – that either party accrued during the marriage. A retirement plan may be one of the couple’s most valuable marital assets, so it is essential to understand if and how the value of the plan is divided during the divorce proceedings.
Marital vs. Separate Property
In many cases, a spouse’s retirement plan accrues during the marriage, and so the entire value of the plan is considered to be marital property. In other cases, however, a pension or retirement plan accrues partially prior to the marriage and partially during the marriage. As a result, part of the value of the plan may be separate property belonging to one spouse, whereas the other part of the value of the plan may be marital property that must be divided in the divorce. In this case, the spouse who owns the plan might retain one-half of the value of the plan as separate property, since he made the contributions prior to the parties’ marriage. The other half of the value of the plan, then, would be divided between the parties in a fair and equitable manner. However, what is equitable is not always what is equal under Florida law. Certain factors will affect the court’s determination of how property should be equitably divided, including the length of your marriage, the overall financial status of each spouse, each spouse’s contributions to the marriage, and each spouse’s outstanding debts. Therefore, you should have no expectation that you are automatically entitled to half of the value of your spouse’s retirement plan.
Dividing the Retirement Plan Funds
If it is necessary to divide up the value of a pension or other retirement plan between two divorcing spouses, the court will issue a special order, or a qualified domestic relations order (QDRO), to apportion the appropriate percentage of the plan’s value to the spouse who does not own the plan. A QDRO establishes the non-owner spouse’s legal right to a designated percentage of either the balance of the plan (as of a certain date) or benefit payments. Pursuant to a QDRO, the administrator of the retirement plan must take steps to divide the balance or payments accordingly, and advise the non-owner spouse as to his or her potential options to handle his or her portion of the funds. Many times, a non-owner spouse is entitled to simply leave the funds with the plan and allow them to grow over time. In other cases, the non-owner spouse may have to roll the funds over into another type of retirement plan. If the non-owner spouse is of a certain age, then he or she may even the right to receive distribution of the funds without being penalized. These options are all dependent on the provisions of the plan.
Contact Your Fort Lauderdale Family Law Attorney for Legal Advice
If you are facing a divorce, retirement plans and pensions may be among your most valuable assets. Due to the complexities surrounding these issues, you need to immediately consult with an experienced Florida family law attorney who can guide you through all aspects of your divorce case, including the division of any retirement plans or pensions. This is the only way to ensure that you get a fair share of the marital assets in your divorce. Contact Vanessa L. Prieto Law Offices, LLC, today, and see how we can help.