Do I have to share my pension after my Florida divorce?
Under the Florida Statute 61.076, “All vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs are marital assets subject to equitable distribution.”
In most cases, retirement accounts and pensions will be divided between the parties as part of the divorce. The court will make the transfer based on a number of factors. Florida is what is known as an “equitable distribution” state. Some mistakenly believe that this means everything owned by the couple will be split 50/50 at the time of the divorce in every case. However this is not always true as courts are required to make a just and fair division of the marital property, but not necessarily an equal division.
It is important to note that the entire value of a particular retirement plan or pension is not necessarily considered marital property and subject to division. Instead, only that amount of the plan that was earned or built up during the course of the marriage is subject to division. Courts use various methods to come up with the amount of a retirement plan or pension that was earned during the course of the marriage and that is subject to division.
Factors used by the courts in determining how to divide the marital property – including retirement benefits and pension plans – include:
- Length of the marriage;
- The overall economic circumstances of each spouse;
- Each spouse’s contributions to the marriage, including contributing to the improvement of marital or non-marital assets; and
- Each spouse’s debts and liabilities.
Division of retirement benefits also requires the preparation of a Qualified Domestic Relations Order or QDRO. This order establishes an ex-spouse’s legal right to receive a certain percentage of a qualifying retirement plan’s balance or benefit payments and directs a retirement plan’s administrator to make payments accordingly. There can be significant tax consequences if a QDRO is not prepared or is prepared incorrectly.
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