Dividing retirement assets

How Are Retirement Plan Assets Divided in a Divorce?
Retirement assets such as IRAs, pension plans, and 401k plans are deferred compensation plans that are divisible as part of a property settlement in divorce.
Because retirement benefits may be part of the division of marital assets regardless of who is named on the plan, it’s essential to know how they are valued and divided. Here’s what you should know about dividing retirement plans in divorce:
Types of Retirement Assets
How retirement assets share will depend on factors such as the type of deferred compensation plan. The following are the two primary forms:
Defined Benefit plans – A defined benefit plan is a company retirement plan such as a pension plan that is based on an employee’s years of service and salary history. At the beginning of retirement age, the employee is provided a monthly benefit with payment continuing for the rest of their life.
Defined Contribution plans – A defined contribution plan’s value is determined by the contribution amounts made into a retirement account, commonly a savings plan such as 401k, IRA, or ESOP.
Methods of Dividing a Retirement Account
Before dividing a retirement account, the present value of the benefits must first be determined. With a defined contribution plan, the present value is the current vested value and will divide the value between the two parties. A professional usually is required to obtain the correct value.
Dividing a defined benefit plan is a little more complicated. There are two different methods of sharing the pension; the present value calculation or the division of future benefit. The division of future benefit approach is also known as the “deferred distribution method;” in this case, the couple shares the future stream of monthly benefits.
With the present value calculation, also known as the “Immediate Offset Method,” the current value of the pension is divided at the time of the divorce. In this scenario, the non-pension holder gives up any rights to future pension payment, and the pension plan holder keeps 100% of all future pension benefits. It is usually the method for couples who do not want to have anything that ties them together, well into their retirement age. However, there are tax implications when dividing a pensions present value.
In a case of division of future benefit, a Qualified Domestic Relations Order (QDRO) is drafted to instruct how the pension plan is paid out to the non-plan-holder spouse.
Qualified Domestic Relations Order (QDRO) Explained
A QDRO is short for Qualified Domestic Relations Order. It can protect your interests in a situation where your spouse is the primary breadwinner, and you need to ensure your share of their retirement account. A QDRO is a court order or judgment that can guarantee you receive the benefits in which you are legally entitled. QDRO is used for private company pensions. A different tyro of order is required for Military pensions. Another order is required for federal civil pensions such as from the Post office. The document is typically written out by a divorce lawyer that specializes in preparing QDROs and other pension orders. It is then signed by a judge, outlining specific instructions to the administrator of the pension how future pension benefits will be divided between the plan holder and ex-spouse and submitted to the retirement plan administrator.
You do not need a QDRO for IRA’s as they can just be divided as necessary.
If you would like to discuss the specifics of your divorce case or need more information about protecting and dividing assets in the divorce, call Debora A. Diaz at 727-846-1802.
Written by: Debora A. Diaz Esquire

It can be a complicated issue, further exacerbated by one or both of the spouses attempting to hide their assets from the court in order to be favored in the court’s decision. If you’re going through a divorce in Florida, you might benefit from learning more about assets and income:

What Are Assets?

Assets are certain pieces of property which have a measurable present value. More often than not, they are material possessions such as real estate properties, vehicles, valuable collectibles, etc. However, trademarks, copyrights, patents and other things without a tangible value can also be considered assets.

What Is Income?

On the other hand, income streams differ slightly from assets as they classify as anything that can yield regular income. Some examples include income from renting a property, income from a retirement account, as well as income from home business.

The significance of income streams in divorce proceedings is tied to the court’s decision on whether one of the spouses should have alimony awarded. Additionally, if the ex-spouses have children together, income streams are essential for the court to be able to determine the appropriate amount of child support.

How Are Assets and Income Divided?

In Florida, courts strive to divide all assets equitably. It does not imply a 50-50 division, but rather that each of the spouses will be treated fairly. For example, if one of the spouses wishes to retain an asset of higher value as it holds a specific significance to them, the other person will likely be rewarded with additional assets to keep the division balanced.

When it comes to income streams, the division is a little more complicated, but still done honoring the principles of equity. An ongoing source of income is usually divided based on a percentage that one spouse should pay to another, and the court sets that amount.

What If an Item Is Both an Asset and Income?

In some rare cases, an item is considered both an asset and income, and it does happen that the line gets blurry between the two. For example, in the case of a property that the ex-spouses renovated and turned into a rental property which yielded regular income, it can be unclear whether the property should be considered an asset or an income stream.

Sometimes courts can classify an item as both, although this practice was not used until recently. The main concern of allowing this practice is that it may enable the spouses benefiting from asset division to have double benefits from a single item. However, the courts are permitted to consider income streams coming from assets that were previously equitably divided, to determine whether to award alimony and how much it should be.

Divorce can get quite complicated, and it’s crucial to know your rights and consult with a family law professional to make the process as smooth as possible.

If you would like to discuss the specifics of your divorce case or need more information about assets and income in Florida divorce, call Debora A. Diaz at 727-846-1802.

If you have questions about divorce, child support, shared parental responsibility, time-sharing/parenting time, and parenting plans, contact Debora A. Diaz Esquire at 727-846-1802 to schedule a consultation or use the Scheduling Link: https://deboradiazlawscheduling.as.me/.

At this time, all consultations are by telephone or video conferencing in order to protect our staff and clients.

Attorney Diaz practices exclusively in divorce and family law in Florida. Debora A. Diaz is also a Florida Supreme Court Certified Family Mediator.

Written by: Debora A. Diaz Esquire

However, in Florida law, there is specific terminology and legal concepts that you should be acquainted with before creating a parenting plan. Let’s have a closer look at what parenting plans are, and what you can do to ensure that yours will cover what is best for the children:

What’s a Parenting Plan and What Should It Contain?

Since a parenting plan is supposed to outline your childcare arrangements with the other parent, there is specific information it has to include:

• Time-sharing schedule;
• Information about which parent will be responsible for health care;
• Written description and provisions about how the parents are going to share the responsibility for raising the child;
• Information about which parent will be in charge of the school and extracurricular activities;
• Information about whose address will be listed and used for school-boundary determination as well as registration;
• Information about the technologies that the parents intend to use for communication with the child.

Florida Terminology Related to Parenting Plans

You might be familiar with terms such as custody and visitation, but in Florida law, they are replaced with parental responsibility and time-sharing.

When it comes to parental responsibility, it can share with the other parent, or one parent could have the sole obligation. It refers to the authority each parent has to make decisions about, and, for the child, including matters such as health care, education, discipline, etc. It’s up to the parents to agree how they are going to divide their parental duties. Courts prefer they shared parental responsibility unless it is not in the child’s best interests.

Time-sharing outlines how much time each parent will spend with the child. In case you have sole parental responsibility, it can be with or without time-sharing with the other parent.

Creating a Parenting Plan with the Other Parent

To create a good parenting plan for your kids, you and the other parent should cooperate and consider the child’s best interests. It might be necessary to go through the parenting coordination program to attain an agreement. If you fail to reach an agreement with the other parent regarding the parenting plan even with the help of the coordinator, then it will be up to the court to determine your parenting plan and order it.

It is best if the parents can settle on a plan which they both agree. In that case, once the program is complete, it is submitted to the court and accepted by the judge. When creating a parenting plan, it’s important to consider different factors:

• Whether the parents live close to one another or not;
• The ability of each parent to maintain a good relationship with the child and provide them with a stable and safe environment;
• How stable each of the parents is when it comes to their physical, emotional and mental well-being.

Divorce is never easy, but with some effort, you might avoid it negatively impacting your children by creating a good parenting plan with the other parent.

It is important to know your rights. If you would like to discuss the specifics of your divorce case or need help with creating a parenting plan, call Debora A. Diaz Esquire at 727-846-1802.

Attorney Diaz is also a Supreme Court Certified Family Law Mediator and is available to mediate your case.

Written by Debora A. Diaz, Esq.

Although there have been many attempts to modify alimony and there is pending legislation to change alimony it currently is still an option in Florida.  Do not listen to people that say no alimony in Florida.  Talk to an attorney.
Approaching the issue of alimony can be tricky, and there are some factors to review when deciding whether to seek alimony in your divorce. Let’s have a closer look at what alimony in Florida entails by law and what you should consider when requesting maintenance:
What Is Alimony?
Alimony is the legal mechanism through which the spouse with greater financial capabilities makes an allowance to the other spouse after a divorce. There are different types of alimony available under Florida law.
Types of Alimony in Florida
• Temporary alimony — this type of maintenance is also known as alimony pendente lite, and it’s terminated automatically as soon as the divorce finalizes, when a different kind of alimony may replace it;
• Bridge-the-gap alimony — a transitional form of alimony that helps the recipient spouse adjust from being in a marriage to becoming single, and it’s meant to cover their short-term needs, so it usually cannot last more than two years;
• Rehabilitative alimony — this type of alimony is intended to help the recipient spouse become self-supporting by assisting them in payment for developing new skills or further training that helps them build their credentials;
• Durational alimony — a type of maintenance which has a specified duration, usually following marriages that lasted less than 17 years, and it cannot continue longer than the length of the marriage;
• Permanent alimony — if a party can’t fulfill their practical needs that were established during the marriage on their own, permanent alimony can be awarded to assist with that, usually in long or medium-length marriages (between 7 and 17 years).
Factors to Consider When Requesting Alimony
Determining what would be an appropriate alimony amount can be complicated under the Florida law. There are different things that a judge may consider, and you should be aware of them before requesting alimony. The factors that affect the amount to award include the recipient spouse’s need, which provides for their current standard of living.
Another critical factor is the duration of the marriage, where long-term marriages may suggest that the recipient spouse has given many years of their total life to the union. In those cases, permanent alimony might be the most appropriate. It’s also important to consider each party’s financial resources and their contribution to the marriage, which doesn’t exclude childcare and support of the other party’s career. There are several other factors that the court will look to in determining whether alimony is appropriate.
Every case is different and fact-specific, so it is essential to understand the underlying principles of alimony in Florida to know what you might expect.
If you are interested in learning more about the factors that affect alimony in Florida or if you wish to discuss the specifics of your case, call divorce attorney, Debora A. Diaz at 727-846-1802 to schedule a consultation. It is important to know your rights!

Written by Debora A. Diaz, Esq.