There is a lot to consider in a Florida divorce. But one often overlooked aspect is the retirement plan. Many people may believe that their retirement plan is not affected. After all, only one spouse contributed to it, and it is generally only held in their name.
Unfortunately, these are mistaken beliefs that can have significant financial impacts in the future. A retirement plan will be factored into the divorce, even if it is only in one spouse's name. Thus, depending on your situation, your retirement plan may be divided with your spouse.
What Is Marital and Separate Property in Florida?
Before going into the specifics of how your retirement plan will be distributed, it is important to cover how Florida classifies property during divorce proceedings. Anything acquired before the marriage is considered separate property. Anything acquired during the marriage is marital property.
Under Florida law, the court has jurisdiction to divide marital property. It does not split anything falling under the separate property classification. So how does this distinction affect retirement accounts?
How Retirement Accounts Are Classified in Florida
Under Florida Statutes § 61.076, retirement accounts, whether they are vested or unvested, may be considered marital property.
Thus, any of the following may be divided in a divorce:
- Deferred compensation
- Insurance plans
Note, however, that these accounts may be considered marital property. In some cases, they can be both marital and separate property. What determines the classification is when they were contributed into.
If you contributed to your retirement account only during the marriage, the entire amount is marital property. However, if you had your retirement account before your marriage and continued to contribute to it while you were married, it is both marital and separate property. Therefore, a portion of your retirement account may be divided, and a portion may not.
How Are Retirement Plans Distributed?
Florida is an equitable distribution state (Florida Statutes § 61.075). Equitable distribution does not mean that there will be a 50/50 split in your liabilities and assets. Rather, it means that the court will determine a fair and just way to divvy up your property – that includes amounts in your retirement account.
Some of the factors the court will consider when determining how to split marital property include, but are not limited to:
- Each spouse's contributions during the marriage;
- Each spouse's economic circumstances;
- Length of the marriage
- Whether either spouse interrupted their career or education for the marriage;
- Whether either spouse wishes to keep certain assets intact, without the other spouse having claim to them.
Divvying up retirement plans becomes a bit complicated because, as mentioned earlier, they can be both separate and marital property. To make an equitable distribution, the court must set aside that which is separate property. In other words, it will not consider any contributions made to the plan before the marriage. This means that the portion of your retirement plan your spouse may be entitled to depends on the contributions you made while you were married.
What Is a QDRO?
If you have a retirement plan that will be split as part of your divorce, you will come across the term Qualified Domestic Relations Order or QDRO. This document is issued by the court and identifies what portion of your plan your spouse is entitled to.
Distribution of your retirement benefits is not automatic, even if the court has decided that your spouse is entitled to a certain percentage. Your spouse must submit the QDRO to the agency overseeing your retirement account. It must then be approved before the agency will pay out benefits to them as an alternate payee. If your spouse does not file this form, they will have no legal right to receive part of your retirement benefits.
Divorces can be complicated, especially if you must consider financial assets such as retirement accounts. That is why it is important to speak with an Altamonte Springs family law attorney about your case. They can work to ensure that all factors are considered and property division is just.