Divorcing in Florida & Your Retirement

When spouses divorce in Florida, assets and liabilities are subject to equitable distribution. Equitable distribution in contested divorce cases is governed under Florida Statute 61.075. Equitable distribution (as it applies to assets) means that we look at what assets were acquired during the course of the marriage then we determine which assets are marital and which assets are non marital. From there, we assign a value to the assets and equitably divide them between the parties.

Divorce & Equitable Distribution of Retirement Funds

Retirement funds accumulated during your marriage are considered marital property and ARE typically subject to equitable distribution. This means the court will divide these assets fairly, but not necessarily equally. We’ve explained previously what a Qualified Domestic Relations Order (QDRO) is and how it is used to divide retirement accounts such as 401(k)s and pensions which allows for a tax-free transfer between spouses. QDROs are very specialized and very often we work with attorneys who specialize in preparing these QDROs to perfect and formalize your interest in a particular pension plan. Pension plans can be very complicated depending upon the nature of the plan and how it arose during the course of the marriage as well as other various issues.

Learn more: QDROs (Qualified Domestic Relations Orders)

Key Points of 401(k) & Pension Division in Contested Divorces in Tampa Bay

Equitable Distribution: Florida law mandates that marital assets, including 401(k)s, be divided fairly and equitably.
Marital vs. Non-Marital: Only the portion of the 401(k) accumulated during the marriage is subject to division. Contributions and earnings before the marriage are considered non-marital property.
QDRO: A QDRO is a court order specifically designed to divide retirement accounts like 401(k)s in divorce. A Qualified Domestic Relations Order allows for the transfer of funds to the non-employee spouse without triggering early withdrawal penalties or taxes.
Valuations: The current value of the marital portion of the 401(k) is assessed to facilitate equitable distribution.
Alternative Offsets: Frequently, one spouse may keep the entire 401(k) in exchange for other assets of equivalent value.
Tax Implications: It’s important to note and to understand the potential tax consequences when divorcing and withdrawing or transferring funds from a 401(k).

If you’re divorcing in Pinellas, Hillsborough or Pasco County, hiring an experienced Tampa divorce attorney who is well versed in equitable distribution, and who will valuate and negotiate your retirement plans and/or draft a QDRO to mitigate these issues is crucial.

We have previously explained what a Qualified Domestic Relations Order (QDRO) is and how it is used to divide retirement accounts like 401(k)s and pensions, allowing for a tax-free transfer between spouses. QDROs are very specialized and very often we work with attorneys who specialize in preparing these QDROs to perfect and formalize your interest in a particular pension plan. Pension plans can be very complicated depending upon the nature of the plan, depending upon how it arose during the course of the marriage as well as other various issues.

Learn more: QDROs (Qualified Domestic Relations Orders)

Key Points of 401(k) & Pension Division in Contested Divorces

Equitable Distribution: Florida law mandates that marital assets, including 401(k)s, be divided fairly and equitably.
Marital vs. Non-Marital: Only the portion of the 401(k) accumulated during the marriage is subject to division. Contributions and earnings before the marriage are considered non-marital property.
QDRO: A QDRO is a court order specifically designed to divide retirement accounts like 401(k)s in divorce. A Qualified Domestic Relations Order allows for the transfer of funds to the non-employee spouse without triggering early withdrawal penalties or taxes.
Valuations: The current value of the marital portion of the 401(k) is assessed to facilitate equitable distribution.
Alternative Offsets: Frequently, one spouse may keep the entire 401(k) in exchange for other assets of equivalent value.
Tax Implications: It’s important to note and to understand the potential tax consequences of withdrawing or transferring funds from a 401(k).

If you’re divorcing in Tampa Bay, it’s important to hire an experienced Tampa divorce attorney . We will properly valuate your retirement plans then draft a QDRO or other type of marital settlement agreement that will seek to mitigate issues of retirement. Remember, every divorce is different. Whether you are a high net worth individual in your 30’s divorcing after a short term marriage or, you’re over 50 and divorcing after having been in a long term marriage, we offer the experience, legal solutions and representation that you need and deserve.