In divorces, a large asset for most people is their retirement or pension. A pension or retirement account is likely a marital asset that has to be divided by the divorce court. If a spouse began saving for retirement before the marriage, or if it is a second or subsequent divorce, then all of the pension may not be a part of the marital estate.
In a recent case, the Husband attempted to argue that a portion of his civil service retirement was nonmarital. Unfortunately, he had cashed out his retirement benefits and then began contributing to retirement savings again. That means that the he made the asset marital. The husband then purchased the rights to have past years counted but did so using marital funds. The couple utilized “marital funds based on the parties’ joint decision to make 8 years of installment payments because it would be better for the couple financially in the future.”
In Florida, there is a presumption that assets acquired during the marriage are marital assets and subject to equitable distribution. A party claiming that an asset acquired during the marriage is nonmarital, bears the burden of overcoming the presumption. Property acquired during a marriage is considered marital property until proven otherwise.
According to the Court, there was no Florida divorce case law on the specific point of purchasing credit for premarital retirement years, using marital funds. The Court wrote, like most states having considered the issue, that when marital funds are used to purchase credit for premarital years of employment, the enhanced value to the pension plan is marital. Using marital funds to purchase any item, including retirement benefit, makes that item a marital asset. According to the Court, New York and California have reached the opposite result.
In any divorce, a lawyer can help guide through the process. If assistance is needed determining how to split retirement assets, then please click, call or fill out the form to start or continue the process with a lawyer.