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Work with experienced attorney to sort out retirement funds during divorce

Property division is an important aspect of divorce, particularly in cases where significant assets are at stake and one party may be at a significant financial disadvantage compared to the other party in terms of post-divorce financial health. One area where couples can have significant assets built up is retirement accounts, whether 401(k)s, IRAs, or types of accounts.

Under Florida law, the general rule of property division is that marital assets are to be divided equitably, and this includes "all vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing annuity, deferred compensation, and insurance plans and programs." Retirement plans, whether they involve defined contributions or defined benefits, are subject to equitable distribution in divorce.

Individual retirement accounts are held separately rather than jointly. Because retirement accounts are considered separate property, the non-holding spouse must be named a beneficiary in order to receive funds. That being said, funds contributed to a retirement account during the marriage are considered in some states to be marital property and are subject to division. If a spouse is not named as a beneficiary of a retirement account and the funds are, by law, not considered to be marital property, there is nothing the spouse can do but negotiate with the retirement account holder.

One of the important considerations with retirement accounts is that early withdrawal of funds can result in significant penalties. In our next post, we'll talk about a way around these penalties, and the importance of negotiating retirement assets in divorce.


2016 Florida Statutes, Section 61.075

Marketwatch, "The Moneyologist: How can I get my hands on half of my ex-husband's $1 million IRA?," Quentin Fottrell, Mar 19, 2017. 

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