Couples negotiating terms for a Florida divorce often find themselves disagreeing on many different issues. Those with children may fight about custody arrangements, but not every household includes minor children. Those without children or whose children are over the age of 18 may focus instead on property division matters.
It can be very difficult for couples to negotiate a reasonable division of their assets. The more property that people acquire during a marriage, the more likely they are to have strong feelings about how they divide those resources if they divorce. Assets with more value and more impact on someone’s future tend to cause more conflict than personal resources worth a small amount of money. Retirement accounts are often a point of contention in the early negotiations of a Florida divorce. Are retirement savings subject to division?
Contributions during a marriage are potentially divisible
Some people start saving for retirement before they get married. They may point to the fact that they started funding the account before the marriage as evidence that they can claim it as separate property. However, unless they have a prenuptial agreement stating that exact condition, the chances are good that the deposits made during the marriage are subject to division. Neither the name on the account nor the date when someone initially began saving ultimately determines if the retirement account is part of the marital estate. The timing of contributions is the main consideration. Additions to the account during the marriage are often subject to division.
People can account for funds without splitting them
There are two different ways to handle retirement savings in a Florida divorce. People can actually divide the accounts or use the marital balance of the account to justify other property division choices. Those who do divide retirement savings accounts after a divorce can potentially avoid taxes and penalties by using special paperwork. There is no rule stating that spouses have to divide every asset or that the property division terms must be absolutely equal.
The equitable distribution statute in Florida leaves a lot to the discretion of spouses or a judge presiding over their divorce proceedings. Understanding when retirement savings are subject to division may help people better prepare for property division negotiations accordingly.