On behalf of The Law Office of Gustavo E. Frances, P.A.
For those in Florida who are faced with the need to divide their retirement savings, the sheer volume of available choices can be overwhelming. There are many different ways to approach this common divorce topic, all with a unique set of pros and cons. When handling the division of retirement assets, spouses must take care to make choices that are well-informed to ensure that the actual division follows the prescribed set of rules for each investment.
This begins by taking the time to learn what type of options each plan offers when it comes to dividing the asset in a divorce. Plans that fall under federal law are divided differently than other types of plans. This is also the time to ask the attorney handling the divorce to draft a Qualified Domestic Relations Order or QDRO. This is the document that is used to divide retirement assets, including 401(k)s and pensions. It is important to check with the individual who will be responsible for dividing the asset to ensure that the QRDO is clear and in line with the plan’s requirements.
In the case of a defined benefit plan, spouses will want to understand that the plan should be split at the time of divorce, with each party taking his or her share and placing it into a new account. If not, then the individual who technically “owns” the plan will be the one to determine when the benefits begin. That can be a problem for the other party, who may wish to begin receiving benefits either sooner or later than the former spouse.
The best way to navigate the waters of dividing retirement assets is to work with a Florida divorce attorney who is highly skilled in that area of law. Having a trusted advisor is key to making the best possible decisions. When the time comes to implement the agreed-upon division of benefits, the attorney can be of assistance in facilitating that process and addressing any issues that might arise.
U.S. News & World Report, “12 Steps to Protect Your Money in Divorce“, Christine Giordano, Aug. 15, 2016