Orlando Retirement & Pension Division Attorney
Divorces are major legal events that require the division of property. Splitting assets is not always an easy thing to do, especially when the parties want the same asset. It’s especially difficult when retirement plans and pensions are involved. These assets are often significant, especially if the spouses are older. Plus, there are often costs and taxes involved for splitting them up, which can complicate things even more.
What should you do? What steps need to be taken? See how Orlando retirement & pension division attorney Steve W. Marsee, P.A. Attorney at Law can help you split your retirement assets fairly.
How is a Retirement Plan or Pension Split?
Retirement plans and pensions are, in many cases, a combination of marital and non-marital property if the benefits were in place before the marriage. While non-marital assets are not subject to split in a divorce in Florida, any property acquired during marriage needs to be split equitably with the other spouse. This includes pensions, 401(k) plans, IRAs, and other retirement accounts.
However, keep in mind that equitable distribution does not always mean a 50/50 split. An even split is not always possible for assets in which their value changes over time, such as a pension.
Also, pensions provided by the federal government may not be eligible to be included in a divorce. This means the spouse who owns the plan will get to keep the entire thing.
In most cases, dividing retirement benefits requires a Qualified Domestic Relations Order (QDRO). A QDRO is a court order from the judge that grants one spouse a portion of their ex-spouse’s retirement benefits. The QDRO must include specific details, including the amount of retirement benefits that the spouse is entitled to receive and when the funds will be available.
Those who receive their ex-spouse’s retirement benefits need to be aware of the tax implications involved. After a Florida divorce, you may be ordered to pay a 10% tax on these retirement benefits if you receive them before retirement age. Therefore, you may want to keep the following options in mind:
- Wait until you reach retirement age to take the benefits.
- Roll over the money into your personal retirement account.
- Consider receiving the benefits in the form of a lump-sum payment at a later date to avoid taxes.
- Allow your spouse to keep the retirement account and consider a different asset, such as more cash.
Contact Us Today
Divorces can be challenging and having to split certain assets can be complicated. This is especially true for pensions and other plans that come with fees and tax implications for early withdrawal.
Need help splitting assets in a divorce? Orlando retirement & pension division attorney Steve W. Marsee, P.A. Attorney at Law can guide you through the process and help ensure your assets are split fairly. Schedule a consultation with our office today. Give us a call at 407-521-7171 or fill out the online form.