One of the central issues to address in any divorce proceeding involves the division of the marital assets. Generally speaking, marital assets are considered to be those assets that were acquired over the course of the marriage. There are, of course, a few exceptions. The point is, however, that those assets categorized as marital will be divided by the court. In Florida, as an equitable distribution state, the court will try to divide the assets in a manner that is equitable, or fair. This does not mean that the assets will be divided 50/50. Instead, it means that the court will aim to divide the assets fairly upon considering a number of different factors. One major type of asset that may be subject to equitable distribution, either in whole or in part, includes pensions and retirement accounts.
Are Pensions Divided in a Divorce?
A pension or other retirement account can be considered a marital asset and subject to division in a divorce. Sometimes, a retirement account was opened prior to marriage and continued throughout the course of the marriage. In this type of case, part of the retirement account may be considered marital and the rest of it considered separate and, thus, belonging to the one spouse who opened the account prior to the marriage. That which is considered marital, however, will be subject to division in divorce.
When only a portion of a pension or retirement plan was built up over the course of the marriage, the court will determine what percentage of the amount held within the retirement account was earned during the marriage. Whatever value that percentage is will be subject to equitable division. Among the factors that the court will use in determining a fair division of the marital assets are:
- The length of the marriage
- The contributions of each spouse during the marriage to acquiring marital assets
- The debts and liabilities of each spouse
- The economic circumstances of each spouse
The majority of retirement accounts that are contributed to during a marriage will be considered marital property. In order to make sure the retirement plan is properly divided and significant tax consequences are divided, a Qualified Domestic Relations Order or QDRO is used. The QDRO must be properly prepared and executed. The order establishes a former spouse’s legal right to receive a portion of the balance of a qualifying retirement plan. It can also establish a former spouse’s right to benefit payments. The order itself should direct the administrator of the retirement plan to make benefit payments accordingly pursuant to the QDRO.
Orlando Family Law Attorneys
Division of marital assets and debts can have profound impacts on the finances of both parties to a divorce. Make sure that your best interests are protected throughout divorce proceedings by retaining trusted legal representation. The dedicated team at Orlando Family Team prides itself on always putting our clients first. We are here to pursue, preserve, and protect your best interests throughout divorce proceedings. Contact us today.