How Retirement Accounts Are Handled in Florida Collaborative Divorce

Retirement accounts are often among the most valuable assets in a Florida divorce. Our state’s collaborative law process can provide the non-adversarial, cooperative environment through which a divorcing couple can work through the nuances of complex property division issues, including the splitting of retirement assets. Here, our Clearwater collaborative divorce lawyer provides a guide to how retirement accounts are handled in a divorce in Florida.

The Challenge of Dividing Retirement Assets in a Divorce

For most divorcing couples in Florida, retirement assets are either their first or second most valuable total asset. The house may or may not be worth more. Retirement accounts often represent decades of savings. In a Florida divorce, these accounts are considered marital property to the extent contributions were made during the marriage.

The challenge is that retirement accounts are not like bank accounts. They cannot simply be split in half. There are complicated tax rules, penalties for early withdrawal, and very technical distribution requirements. Certain accounts, such as 401(k)s or pensions, may require a Qualified Domestic Relations Order (QDRO) to divide in a divorce. Without proper planning, there can be penalties.

What is Collaborative Law in Florida?

Collaborative law in Florida is a specialized, non-adversarial process through which a couple can end their marriage in a cooperative and confidential manner. It is governed by the Collaborative Law Process Act. Collaborative divorce is a voluntary process where both spouses commit to resolving their divorce outside of court with the help of collaboratively trained attorneys. Neutral professionals, such as financial specialists, are often part of the team to ensure transparency and cooperation. Notably, that can include financial professionals who are well-versed in retirement assets and the rules surrounding tax-advantaged retirement accounts.

Why Collaborative Divorce Can Be Great Tool for Handling Retirement Account

The collaborative process is especially effective for dividing retirement accounts because it allows spouses to take a practical, forward-looking approach. Instead of fighting over valuations or hiding behind discovery battles, the parties can work with a neutral financial specialist and their attorneys in a cooperative, amicable manner to evaluate account balances, tax consequences, and long-term financial impact.

With that structure in place, they can explore all available options to find the best solution for their specific situation, including things like offsetting retirement accounts with other assets, structuring phased distributions, and/or planning around Social Security benefits. As professionals are involved, the collaborative divorce process also reduces the risk of costly mistakes.

Call Our Clearwater, FL Collaborative Divorce Attorney Today

At the Law Office of Gale H. Moore P.A., our Clearwater collaborative divorce lawyer is a solutions-oriented advocate for clients. If you have any specific questions or concerns about how retirement accounts are handled in a collaborative divorce, please do not hesitate to contact us today for a confidential consultation. We handle collaborative divorce cases in Clearwater, Largo, and throughout all of Pinellas County.