Many people in Tavere and throughout Central Florida may have a lot of money tied up in their 401(k) plan.

Others, including former military professionals and many government employees, may also be entitled to a pension.

As people get into their fifties and early sixties and start thinking about retirement, these plans ideally be worth hundreds of thousands if not millions of dollars.

What this means is that, should a couple go through a late-in-life or gray divorce, it may be critically important from a financial perspective to make sure these retirement plans get divided correctly.

Is the retirement plan marital property?

Retirement plans are considered marital property under Florida law to the extent that a person acquired them during their marriage. This rule applies even if the retirement plan is subject to certain vesting rules or other restrictions.

Although this rule seems straightforward, there could be some arguments as to exactly when a relationship legally ended or how much the plan was worth at the time of the marriage.

Like other states, Florida also focuses on overall fairness when dividing property rather than perfecting a 50-50 split. As such, the holder of a retirement plan may be entitled to more or less than half of the portion of the plan that is marital property. What is an equitable division of property will depend on a number of circumstances.

The nuts and bolts of dividing the property

Figuring out how much of a retirement plan each person should receive is not the final step in dividing it after a divorce.

While other options are available, it often is best for the spouse who holds the retirement plan to agree to segregate and

Because retirement plans receive favored tax treatment, there are rules which restrict when a person can withdraw from these plans early without incurring a significant tax penalty.

While a divorce is a valid reason to do an early withdrawal, in order to take advantage of this exception, the holder of the retirement plan has to have a judge signed a qualified domestic relations order, or QDRO, and provide it to the administrator of the retirement plan.

Usually, the attorneys prepare the QDRO for the judge to sign. When doing so, they must pay careful attention. A mistake can cost people in terms of time and inconveniences. In some cases, a poorly drafted QDRO can cause a severe financial fallout.