Division Of Retirement Assets In A Florida Divorce
Retirement accounts, like all other assets that qualify as marital property, are divisible assets in a Florida divorce. This means that retirement benefits that were acquired after a marriage can be equally distributed between divorcing couples, even if the account was started or opened before the couples were married.
The benefit that is considered a marital asset is one that increased during the marriage. For example, if an employee had a 401k through his employer before marriage, in which he contributed funds with an employer match, that benefit would likely be separate property. However, any contributions, employer match, and increased value in the 401k after the marriage would be eligible for division as marital property.
There are different methods that are used to calculate a spousal share of retirement benefits. In most cases, retirement benefits change depending on when the employee retires, and an employee can retire early and receive a reduced amount due to penalties. Therefore calculations are based on the facts of each individual case. However, it is possible for the spouses to decide how the money should be paid out once the amount is calculated, and one way is for a spouse to receive a lump sum amount reduced to present value.
Spouses that have comparable retirement accounts may choose to avoid the hassle of deciding how to split retirement accounts by agreeing for each spouse to simply keep their own account and relinquish a claim to the other spouse’s account. However, this would not keep a court from considering these accounts as income for purposes of calculating child support or alimony payments if they are to be ordered in the case.
If a spouse is granted a right to receive a portion of an ex-spouse’s retirement benefits, the court has to issue a Qualified Domestic Relations Orders (QDRO) before the employer will agree to make payments to the spouse, who is now deemed an alternate payee on the retirement account. If a QDRO is not part of the divorce decree, a court can order it at a later time, but the award of retirement benefits has to be in the divorce decree.
Divorced spouses should also remember that they are entitled to social security benefits based on the working record of a former spouse if the marriage lasted for more than ten years. This benefit is not granted as part of a divorce order from a judge, rather, it is granted by operation of law. If you remarried after your divorce, this benefit may not be available to you. However, you may collect social security benefits based on your former spouse’s record even if your spouse is remarried.
Contact us for Legal Assistance
Figuring out how to split retirement accounts can be a difficult process, and you may receive a lot of push back from a spouse who resents having to split this particular asset. For more information on what is involved in a division of retirement assets, contact the experienced divorce attorneys at the Law Offices of Schwartz | White in Boca Raton, Florida.