One of the more difficult things that our Florida Supreme Court Certified Mediators at Mediation of Coral Springs has to explain to the parties is how retirement benefits are divided upon a husband and wife obtaining a Dissolution of Marriage in Florida. In order to divide retirement benefits, a legal document that is called a Qualified Domestic Relations Order (QDRO) has to be drafted, approved by retirement plan administrators, and then approved by the Florida Family Law Court.
In addition, our Florida Supreme Court Certified Mediators recognize that retirement benefits may have significant federal income tax consequences if these benefits are received in a manner that violates the United States Tax Code. This is why a QDRO must be approved by the retirement plan administrator.
Our mediators often hear one spouse, especially in a long-term and high asset marriage, question “why is my spouse entitled to a share of my pension? I worked 20-something years, so I can eventually retire and have an income to live on!” Well, to start with Florida Statute § 61.076 (1) provides for the distribution of retirement plans upon parties getting divorced. This statute states in part that “All vested and nonvested benefits, rights, and funds accrued during the marriage in retirement, pension, profit-sharing, annuity, deferred compensation, and insurance plans and programs are marital assets subject to equitable distribution.”
Since our Florida Supreme Court Certified Mediators are not allowed to give legal advice, it is very beneficial if your spouse has any type of retirement benefits as listed above that you are represented by legal counsel to assist you manage through this process at mediation. It is also extremely helpful during this type of a mediation session when the spouses are represented by attorneys who are experienced in dealing with the important issues that are inherent in the division of retirement plans during your dissolution of marriage. If you really think about it, a proper division of retirement plans can have a lasting impact on both party’s future financial security.
Since it is important to have a QDRO approved by a Florida Family Law Court regardless of how contested your mediation is; Mediation of Coral Springs will make certain that your Mediated Settlement Agreement contains a requirement that one or both spouses are responsible to draft a QDRO because a Florida Final Judgment of Dissolution of Marriage alone is not enough to legally divide current retirement benefits or even designate future benefits that are tied up in a retirement plan.
If you are preparing for a mediation and one of the issues is retirement benefits, Mediation of Coral Springs has found it important to have the valuations of each of the retirement benefits because quite often one spouse will trade an asset that is liquid for his or her share of retirement benefits. This is extremely true when there is a huge disparity in the earning capacities of the parties.
Mediation of Coral Springs is very experienced in handling the issues involved with drafting Mediated Settlement Agreements when one or both spouses have retirement benefits which are going to be divided by a QDRO. If you have any questions or concerns, please feel free to contact our office.