How Are Pensions Divided In A Florida Divorce?
Unless you signed a prenuptial agreement that specifies that your retirement accounts and pensions are your separate property, then anything you earned during the marriage (including pensions) is considered part of the marital estate. This means that they are subject to equitable distribution during your divorce. In other words, your spouse could be entitled to half your pension (or more) in Florida. In this article, the Tampa, FL divorce lawyers at Faulkner Law Group, PLLC will discuss how pensions are divided during a Florida divorce.
Understanding Qualified Domestic Relations Orders (QDRO)
A qualified domestic relations order (or QDRO) is a legal tool used across the United States to divide retirement benefits (including pensions) during the divorce process. The QDRO is a court order that instructs the pension plan administrator on how to pay out the pension benefits. This ensures that the non-employee spouse receives their rightful share of the pension during the divorce. The process of preparing a QDRO is complex and must comply with both state laws and the plan’s rules. The QDRO allows you to divide a pension or a retirement plan without triggering any of the plan’s penalties for early disbursal.
Valuating pension benefits
Determining the value of pension benefits is a complex but important part of the divorce process. Several methods exist to determine the present value of the pension plan. These include calculating the sum of future payments discounted to the present day. However, the process is often complex and requires the valuator to include projections of interest rates and assume your life expectancy. For those facing a divorce, having a clear idea about what your pension plan is worth is absolutely crucial to the process.
Equitable distribution considerations
In the majority of cases, courts will divide the marital estate 50/50 between the two spouses. But in some cases, the courts will see fit to award one spouse a greater share of the marital estate than the other. To do so, the courts will consider several factors. These include:
- The length of the marriage
- Contributions made by each spouse to the marriage (including non-financial contributions)
- The overall economic circumstances of both parties to the marriage
It sometimes happens that one spouse has a significantly lower earning power than the other. In these cases, the courts might consider favoring the lower-earning spouse when dividing the marital estate. This is especially true when that spouse contributes housekeeping and childrearing to the marriage as opposed to making financial contributions.
Pensions and separate property
Only the portion of your pension that accrued value during the marriage is considered a part of the marital estate and subject to equitable distribution. All contributions you made to your pension before the marriage (or after the divorce petition) are considered your separate property. Value accrued before or after the marriage is not subject to equitable distribution.
Talk to a Tampa, FL Divorce Lawyer Today
If you have any questions concerning your pension, retirement accounts, or the divorce process, please don’t hesitate to call the Tampa family attorneys at Faulkner Law Group, PLLC. We can help.
