How Are Pension and Retirement Accounts Divided in a Florida Divorce?
As the number of gray divorces across Florida and the United States keeps rising, people aged 50 or older are now more likely to get divorced. If you are an older adult or have been in a long-term marriage, pension and retirement benefits could account for a significant portion of marital assets.
It is important to make sure that pension and retirement accounts are appropriately disclosed and fairly split during the divorce proceedings. For this reason, it is advised to seek help from an Orlando property division attorney to help you get a fair share of pension and retirement benefits.
How Are Pension Benefits Divided in a Florida Divorce?
Section 61.075, Florida Statutes, requires equitable distribution of marital property acquired during the marriage. Pensions, 401(k) plans, IRAs, and annuities are subject to equitable distribution in the State of Florida.
Equitable does not always mean a 50/50 split. However, dividing pension benefits and retirement accounts is more complicated than splitting marital assets with a fixed value, such as equity in a marital home.
Often, pension benefits are a combination of separate and marital property if the benefits began to accrue before the marriage. In Florida, assets acquired before the marriage are treated as separate property and are not subject to equitable distribution.
How Are Retirement Benefits Split During a Divorce?
Similar to pension benefits, retirement benefits are split between the spouses in an equitable manner. In most cases, dividing retirement benefits requires the parties to request a Qualified Domestic Relations Order (QDRO) from the judge. A QDRO is a special court order that grants one spouse the rights to a portion of the retirement benefits of their ex-spouse.
The QDRO must specify the amount of retirement benefits that a spouse is entitled to, as well as when they will be available to the spouse. However, you need to understand the tax implications of receiving your former spouse’s retirement benefits upon a divorce in Florida.
According to the Internal Revenue Service (IRS), you may have to pay an additional 10% tax on any retirement benefits that you receive before reaching retirement age, unless the distribution qualifies for an exception.
For this reason, if you are entitled to a portion of your ex-spouse retirement benefits, consider the following options:
- Wait until you reach retirement age to take the benefits in the form of periodic payments;
- Roll over the funds into your personal retirement account; or
- Receive the benefits in a lump-sum payment at a later date to avoid the tax.
Also, according to the Social Security Administration (SSA), you may be entitled to receive Social Security benefits based on your former spouse’s record if the following criteria are met:
- Your marriage lasted longer than 10 years;
- You are currently not married;
- You reached the age of 62 or older;
- The Social Security benefits that you are entitled to receive based on your own work is less than the amount of benefits you would receive based on your ex-spouse’s record; and
- Your former spouse is entitled to Social Security disability or retirement benefits.
Going through a divorce is a confusing process, but even more so if you have lots of marital property and assets to divide. It would be a good idea to seek help from an experienced property division attorney in Orlando to ensure that you get a fair share of your ex-spouse’s retirement and pension benefits. Contact our attorneys at Orlando Greater Family Law to talk about your situation. Call at 407-377-6399.