If you and your spouse have decided to divorce later in life, you likely have different problems than a younger couple would. For example, there likely won’t be any child custody issues for you to worry about. On the other hand, you will have to decide what to do with the retirement accounts that you have been building up for your entire career. What can you do to protect them so that you aren’t left with nothing to depend on when it’s all over?
Negotiating a divorce agreement
The court does not necessarily have to divide your assets for you after contentious litigation. If you have a relatively cordial relationship with your spouse, you can hire attorneys or a mediator and negotiate an agreement amongst yourselves to present to the judge for approval.
This means that you have an opportunity to take your asset division into your own hands and get creative. If your retirement account is far and away the most valuable thing that you own, then you might be able to convince your spouse to let you keep it intact – if you offset its value by offering other assets to them.
For example, if you are okay with parting with your house, vehicles or other high-value items, you might be able to come to a mutually beneficial agreement where splitting your retirement account isn’t necessary.
Property division by the court
If you are unable to come to a private agreement as to how to divide your property, the court will have to step in and direct the asset division process. In doing this, they will follow Florida’s property division laws.
They will first divide your assets into marital property and separate property. There are a few exceptions to this categorization, but in general, marital property is anything you acquired during the marriage, while separate property is anything you had before getting married – which is not subject to division. This categorization also applies to contributions into your retirement accounts.
In other words, courts can determine how much of the balance of your retirement account was contributed before you were married, and how much was added during your marriage. Only the portion of it that you accrued during your marriage is subject to division – the part you earned before marriage will remain yours.
It can be very upsetting to lose a large portion of a retirement that you worked so hard to build up for your entire working life. With a properly negotiated divorce agreement, you may have the chance to protect it against division, so that you can enjoy it when you retire.