Divorce can be a complex process. Often, the law can be confusing when it comes to divorce, especially concerning division of assets. In fact, determining just how to divide assets is often one of the most contentious parts of the divorce process. One common subject that often plays an important role in asset division is pensions, and understanding the law when it comes to dividing a pension is crucial to making informed choices about them during your divorce.
Florida’s Approach to Dividing Assets
The first important thing to note when it comes to assets is that Florida is what is called an “equitable distribution” state. That means that when courts are charged with determining how assets should be divided in cases where couples are unable to come to an agreement, they will do so equitably. Basically, that means courts will try to be fair in how they distribute assets based on the unique circumstances of your case, but that does not mean division of assets will be completely equal.
It is also important to remember that while the divorce process requires division of assets, it also requires the division of debt. Prenuptial or postnuptial agreements can make the division of assets and debts much easier, but in the absence of such an agreement it is important to factor debt into the equation when it comes to asset division.
If you have a pension related to your job, then you are probably aware of its purpose. Basically, a pension is available to individuals who retire from positions which offer a pension so that it can help offset the costs of retirement. Usually, pensions are in addition to social security depending on the age of the recipient and their individual circumstances.
No matter at what age you find yourself facing divorce, working with an experienced Florida divorce lawyer who understands the impact the divorce process can have on your retirement is an important part of making informed decisions about your divorce settlement. Divorce can have a significant impact on your retirement even if you and your spouse are many years away from retirement, and considering a pension as part of your negotiations can be very important.
Dividing Private Pensions
For most private pensions, including those offered through some unions and private companies, pensions are typically considered to be marital property, though just how much of that pension will qualify must be determined. For instance, if you accumulated 10 years of pension benefits prior to marriage and 20 years of private pension benefits during marriage, the court is not likely to include pension benefits from the first 10 years in determining how much of the pension is potentially subject to division through the divorce process.
Parties to a divorce are allowed to negotiate an agreement that determines how any future private pension is to be divided. If such an agreement cannot be reached, then a judge can enter an order that divides the pension in question in a way the court determines to be fair. Regardless of how the determination as to how to divide the pension is reached, proceeding with said division usually requires a qualified domestic relations order (“QDRO”) that is sent to the pension plan administrator to provide notice of how the pension in question is subject to future division.
It is important to make sure that you review the terms and conditions of any private pension that may be part of divorce considerations because a QDRO must take into account any provisions that may be part of that pension plan which could override a court order. Determining the best approach to private pension division now can save you a lot of time and money down the line if obstacles or other challenges that you did not anticipate were to arise.
Dividing Public Pensions
Employees of state or local government agencies that have pensions are not subject to same restraints when it comes to asset division. In fact, Florida law does not allow a state or county-level pension that is part of the Florida Retirement System to be subject to division during divorce. Usually local government pensions have the same constraints placed on them. That means that you cannot reach a divorce settlement that includes an order to divide future pension payments as it is likely that a court will deem such an order invalid due to it being in direct contrast with state law.
That does not mean that you are unable to divide property equitably including potential future pension benefits. By working with an experienced Florida divorce lawyer, you can explore various options for division of assets while negotiating a divorce settlement. That may mean including an additional lump sum payment for one spouse as part of the divorce agreement, or it may mean that the spouse with the pension will relinquish his or her claim to a marital home in exchange for retaining his or her entire pension.
You and your spouse may also consider a trust into which a percentage of pension payments will be deposited in the name of the non-qualifying spouse. If the pension beneficiary elects not to retire at the time the pension becomes available, he or she may also have payment distributed to another account in the name of the former spouse while still receiving his or her own normal salary. There are countless possibilities for factoring public pensions into the divorce process even if those pensions are not subject to division, and an experienced lawyer can help you understand more about your options.
Advocating for Your Rights
Pensions are only one of the complex matters often involved in the divorce process. There are a number of different considerations that must factor into any negotiation regarding division of assets, and working with an experienced Florida divorce lawyer who understands how the law affects these considerations can be an important part of being confident in the decisions you make as you move forward in your divorce.
If you are concerned about how asset division – including private or public pensions – might impact you and your family as a result of divorce, contact Scott J. Stadler to schedule a consultation and find out more information about how we can work with you in exploring your options.