The prospect of divorce tends to make people very anxious about their finances, especially the future of their financial stability. After all, divorce can cost thousands of dollars and also demands the division of someone’s property. Some couples have marital agreements that clearly outline how they will divide their assets when they divorce. Most others will have to negotiate an arrangement or turn to the family courts for assistance with the asset division process.
Bigger assets tend to cause more conflict, so retirement accounts are often a top concern in modern Florida divorces. What usually happens with retirement savings when people divorce?
Many couples make their own decisions
Divorce mediation and collaborative proceedings make it easier for those who disagree to work out a settlement that they both believe is fair. Quite a few couples preparing for divorce will find ways to settle their disagreements about property division amicably and then file for an uncontested divorce. In such scenarios, the spouses determine what will happen with the retirement savings. Each spouse might retain specific accounts. The spouses may agree to divide the savings or to use the value of the retirement savings to influence other major decisions about property division. So long as they agree, they can decide for themselves what to do with their assets.
Judges may make the final decision
When spouses are unable to reach an agreement about property division matters, then a judge will make the final decision. In a litigated Florida divorce, the state’s equitable distribution standard applies. A judge will divide the marital estate in a manner that they believe is fair or equitable given the duration of the marriage, the health and economic circumstances of each spouse and other relevant factors. Oftentimes, the division of retirement accounts will be part of that process even if the account is in the name of only one spouse. For the purposes of property division, what matters the most is when people contributed to the account, not whose name is on the account paperwork.
Understanding what typically happens with retirement savings during a Florida divorce may facilitate more reasonable negotiations or help people prepare themselves for the likely outcome of litigation.