An individual retirement account, also known as an IRA, is an investment tool that many Floridians utilize to prepare for their eventual retirement. It is a tool that allows a person to channel funds into an account that will, over time, grow in size due to increases in the value of the investments contained therein. There are requirements on who may open the different types of IRAs and not all individuals may be able to use them to save for their futures.
An IRA can become a major part of a person’s plan to eventually stop working, so if that person finds themselves facing a pending divorce they may have concerns over what will happen to their retirement nest egg. This post will discuss the basics of dividing an IRA during a divorce but as always readers of this blog are reminded that the information contained herein does not offer any financial or legal advice.
In most cases an IRA is considered the property of the person who owns it. A man and a woman may be married for twenty years and each hold their own IRA; should they divorce they may each walk away with their IRA as their separate property.
However, readers of this blog may know that property can be shifted from individual to marital if it is comingled. For example, if the partners comingled their income and used this collective source of wealth to fund their IRAs then each party’s IRA may be subject to division under the martial property laws of the state.
No one wants to see their retirement plans go up in smoke simply because their marriage ended. To establish security in one’s IRA and other retirement tools in the face of a potential divorce a reader may wish to discuss their financial concerns with their family law attorney.