Retirement Plans in Divorce

Family Law Attorneys in Jacksonville and the Surrounding Region

When a couple divorces in Florida, the assets and property accumulated during the marriage, including retirement accounts, may be subject to equitable division. For many people, particularly those nearing retirement, the funds in their pension, 401K, and individual retirement accounts make up a significant portion of their savings. If you are concerned about the potential impact to your retirement savings, or any other issues in a high-asset divorce, a Jacksonville property division lawyer can advise you. At Ellis and Bryant, we understand that your financial security after a divorce is important. Our attorneys have the dedication and experience to advocate for a fair outcome that protects your interests.

Retirement Plans in Divorce

Before a divorce can be finalized, all issues with respect to the division of marital property must be resolved. In Florida, marital property includes the amount of retirement savings and pension benefits that accrued over the duration of the marriage. However, retirement and pension funds earned by an individual before the marriage, or after the divorce, remain the separate property of that person and generally are not subject to division.

Understanding the type of retirement plan at issue can be important to determine the benefits at stake. Most employer-sponsored retirement plans are categorized as either a defined-benefit or defined-contribution plan. Defined-benefit plans, such as pensions, typically provide a determinable monthly benefit amount that is available upon retirement. In defined-contribution plans, on the other hand, the benefits paid upon retirement are not pre-determined, but are based on a number of factors, such as investment performance. Defined-contribution plans include 401(k) and 403(b) plans, profit sharing plans, traditional IRAs, and Roth IRAs.

Dividing Retirement Benefits in Florida

When spouses divorce, the marital portion of their retirement and pension benefits may be divided in one of three ways. If the spouses entered into a valid prenuptial agreement, their marital property may be distributed according to the terms of the agreement. Alternatively, the spouses may reach a property settlement during their divorce that covers their respective retirement plans. Such an agreement may not necessarily mean splitting every retirement account and pension plan if it is not advantageous for either of the spouses. For example, one spouse may keep their retirement benefits, while the other spouse accept another marital asset of comparable value. Finally, if the spouses cannot reach any agreement as to their retirement plans, the marital portion of the retirement benefits is subject to equitable distribution by a Florida court.

Qualified Domestic Relations Order (QDRO)

When retirement plans are divided in a divorce, particularly employer-sponsored plans, a Qualified Domestic Relations Order (QDRO) is essential. A QDRO is a judgment, decree, or order that directs a retirement plan administrator to distribute a defined portion of benefit payments to the participant’s former spouse. The QDRO must contain specific information, such as the amount or percentage of benefits to be paid, and cannot award an amount or form of benefit that is not available under the plan.

Government and military pensions plans that do not fall under the Employee Retirement Income Security Act (ERISA) are not legally required to accept QDROs. They generally have a specific form and process in place for the distribution of benefits to a former spouse, although they may voluntarily accept QDROs. A skilled lawyer can ensure that every requirement has been met for you to receive your portion of pension benefits.

Discuss Retirement Plans in Divorce with a Jacksonville Lawyer

The financial aspects of a divorce may seem difficult, but an experienced lawyer can navigate you through the process. At Ellis and Bryant, our Jacksonville divorce attorneys can provide candid legal advice and work towards a practical solution. We are qualified to handle all areas of family law, including child custody disputes, adoption, and same-sex divorce. We practice throughout Duval and Clay Counties, particularly Jacksonville Beach, Middleburg, and Orange Park. Schedule a free consultation today by calling our office at (904) 551-4120 or contacting us online.