Is My Retirement Account a Marital Asset In Florida?
As a general rule, a retirement account, and any other assets obtained during a marriage, will be considered marital property for the purposes of asset division. The division of a retirement account can be among the biggest sticking points in a divorce case. This is not surprising, as these accounts are often one of the most valuable assets that people own. To learn more about how to handle your retirement account during the divorce process, please contact an experienced Orlando divorce attorney today.
Retirement Accounts and Divorce – Three Frequently Asked Questions
- How Will My Retirement Account Be Divided?
It depends entirely on the individual circumstances of your divorce case. Ultimately, any retirement account will simply be considered one more asset to add to the equitable distribution calculation. Under Florida law, a couple’s marital assets are divided in a manner that is deemed to be ‘fair’. In some marriages, the retirement accounts owned by each individual spouse may simply cancel each other out. If each spouse owns an equally valued retirement account, there may not be much of a dispute over this particular issue. However, in many cases, one spouse has a much larger retirement account. In this circumstance, they may be required to take less in other area to keep their retirement account fully intact. Remember, if you leave this issue up to the courts, you may not get the result you desire. When possible, a collaborative solution works best. You should work with your spouse, through your attorney, to find a mutually beneficial method to divide the value of your property, including any retirement accounts.
- What if My Account Was Acquired Before the Marriage?
Under Florida law, assets that are obtained prior to a marriage are generally considered separate property. Therefore, those assets will not be subject to any equitable distribution considerations. This rule applies to retirement accounts as well. Of course, you likely have continued adding funds to your retirement accounts throughout your marriage. This can makes things a little more complicated, but the principle remains: whatever was in your retirement account prior to your marriage can reasonably be considered separate property.
- How Can I Protect Myself From Tax Penalties?
Retirement accounts must be handled properly. You do not want to be hit with any tax penalties. A divorce is emotionally stressful and financially burdensome enough already; the last thing you need is an additional tax hit. Do not simply cash out your 401(k) or any other retirement account to settle an obligation related to your divorce. If you need to take money out of your retirement accounts for this purpose, it can be done. However, it must be done in the proper manner. Talk to your attorney about using a qualified domestic relations order (QDRO). This legal tool can protect your from early withdrawal penalties.
Do You Need Legal Advice?
Our team is standing by, ready to help. At the Law Offices of Steve W. Marsee, we have extensive experience handling Florida divorce cases. If you are going through a divorce, please call our Orlando office today at 407-521-7171 to learn more about what we can do for you. Our firm represents families throughout Central Florida, including in Alafaya, Apopka and Winter Garden.