21. In Divorce Am I entitled to Half of my Spouse’s Retirement? (BONUS)

Sydney Mitchell (00:13):
Welcome everyone to today’s bonus episode. Matthew and I are going to be tackling some of the questions that you, our listeners have submitted over the course of the past couple of months here. So in divorce, am I entitled to half of my spouse’s retirement?

Matthew Brickman (00:28):
Okay. So before we answer it, just like with the other podcast, we’re just going to put a disclaimer that this is not legal advice. If you need legal advice, please contact your attorney or contact me. I’ve got lots of recommendations. I can give you for our attorneys as well, but this is just answering questions. And, and, and I get this question all the time in mediation as well, like, okay, well, what portion of my entitled to have my spouse’s retirement? And so, um, the general answer is the marital portion. So how do you define the marital portion? Well, the marital portion of anything, whether it’s an asset, a liability is data, marriage to data filing. There are some exceptions, but generally everything valued from the date that you signed your marriage certificate until the date that you file your divorce papers. Whatever’s within that what we call that quadrant is marital to then be divided.

Matthew Brickman (01:19):
Um, now there are some exceptions to that. For example, I had a mediation last week where the parties Sydney was really weird. The parties had been married. I think it was like seven years, but they split up five years ago. So they only live together. So one attorney was actually wanting to value things from the date of separation, not the date of fire, because the date of filing would have added five more years of a division of the asset. The other attorney, who of course doesn’t want to give that portion, which was the husband’s attorney was like, no, we’re doing this date of separation

Sydney Mitchell (01:56):
Over the course of those five years. They had still, you know, continuing there can still continuing to, to submit.

Matthew Brickman (02:01):
Yeah. Yeah. I mean, I mean, it was still coming out of his paycheck. He’s still, you know, contributing towards their retirement. Of course the wife’s going well, I’m entitled to it. The husband’s attorney is like, no, you guys separated. So what happens in that situation is, is, you know, um, it really depends on the state because you know, it depends. Does the state recognize, um, legal separation, Florida does not recognize legal separation, but the court does have some discretion. And so it’s not just so cut and dry my advice to everybody, always not legal advice, but human advices, if it’s not working, then just be done. You know, don’t go having affairs, don’t go get a boyfriend or girlfriend don’t move out and move in with somebody else that never, ever, ever ends well. But it also muddies this question, it muddies the division of the retirement.

Matthew Brickman (02:52):
It makes that more difficult and that actually causes conflict. It causes disagreements. The, and you know, and unfortunately when you start to do something like that, um, it can force you into the legal arena. You know, you and I have talked about how do you resolve conflict? First, you go to each other, then maybe you get a neutral, then maybe an attorney, if not a judge. Well, if this is up to judicial discretion, it forces you all the way to court, which is just expensive. It’s much cheaper and easier to be like, if it’s done, it’s done file and be done. Um, now just know that when dividing up that retirement, what happens is the marital portion is equal. But, um, unless the, again, and there’s, there’s some, some situations where maybe it’s not equal, if there’s marital, dissipation and waste, if you know, um, that, and let me just define that real quick, marital dissipation and waste. So say for example, one party is having an affair and using marital money for that, you know, to buy things for that other person. Well, that could be considered marital dissipation in ways. So then maybe there’s an offset of an equal distribution. Um,

Sydney Mitchell (04:07):
My next question is, is it always the 50 50?

Matthew Brickman (04:10):
Yes and no. I mean, right, right. Which is why, again, it’s so important to really have an attorney look over this or, or discuss with them, or, you know, go and read your state’s laws so that when you come to mediation, we can have these discussions, know what these terms mean. Um, you know, I, you know, in mediation and I have a lot of pro se parties that, you know, no attorneys are involved and they come to me and I can’t tell them, Hey, Sydney, this is what you need to do with your life. This is what you need to do in this case, you know, but I can say, okay, this is what the statute says. Let’s open up and read the statute. And then once we read the statute, then you can figure out how to apply that to your case. And that’s what we do now.

Matthew Brickman (04:51):
The other thing too is, and you know, the, the entitlement, um, to half of the retirement, well, let’s say for example, that, uh, look, I’m gonna use a, a very common, uh, scenario of police officer. So you might have, you might have, um, either a male or female that, you know, went to high school. And then this happens a lot, went to high school, got out, went right into police Academy. And they’ve been a police officer since their twenties, and now they’re getting divorced in their forties, but maybe they only got married in their, you know, when, when they were 30. Well, so they may have 10 years of a retirement that was premarital, right? And so that portion is not to be divided. That’s there as a hundred percent, but then let’s say for example, that they filed for divorce. And then it takes, you know, six months a year to get through the divorce, which we’ve talked about in the past of how to expedite that, you know, by, by coming to mediation and you can greatly down those times, but you know, anything after they filed their divorce papers, well, then that’s not marital.

Matthew Brickman (06:03):
And the way to then figure out, well, what does that marital portion? Cause you’ve got a premarital portion. You may have a post-marital portion. However, we figure that out. It has to go to what we call a Quadro expert. So a Quadro would Q D R O is a qualified domestic relations order. That is the vehicle that we use to divide up a retirement account so that there are no penalties or tax consequences to divide that up. But that has to go to another specialist. So, and then that can’t be divided. So with the retirement account, yes, you might be entitled to half, but guess what? You’re not getting it until after you’re officially divorced because it has tax consequences. So you have to have get officially divorced before that can be divided up. Um, but those, those, uh, Quadro experts will also look at the gains and losses.

Matthew Brickman (06:54):
So for example, let’s, let’s just say hypothetically with this police officer scenario, let’s say that, that they worked 10 years prior to marriage. They’ve got five years of a marital portion and now a year later they’re finally getting divorced. So that marital portion, um, might have had gains and losses, you know, as the market goes up and down, right. And then from the date of filing until they’re finally divorced and then the Quadro is executed. Well, the wife’s marital portion might have still had gains and losses after filing due to the market fluctuations. So let’s say that, you know, her portion is say $25,000, but the market’s been really good lately. Well, so the Quadro expert will go in, isolate her portion and then figure out as the market has gone up and down, then what is her portion? So it may not be so simple as to say, okay, well, the marital portion is 25,000.

Matthew Brickman (07:59):
You’re done because then you’re ignoring gains and losses. And so generally what we do Sydney is we leave that out of, um, the equitable distribution scenario when we’re dividing up assets and debt, because we say, look, you’re entitled to half of the retirement from the date of marriage to the date of filing. And then we send that over to the Quadro expert to determine what that exact amount is for us to really figure that out is almost impossible. But there are some times where parties just agree to an amount there and they were okay too. They’re like, look, you know what? Instead of spending all of that money to figure out, let’s just call it $35,000 and be done, you can do whatever you want. So you got a question about that.

Sydney Mitchell (08:48):
Yeah. Um, okay. So you said that hiring or that having the Quadros expert or specialist, however, refer to them is a required part of this entire process. Correct. Does that get expensive? How does that look?

Matthew Brickman (09:02):
So I there’s, there’s about six different individuals or companies that I’m familiar with. And what I tell people is shop it out because, um, I’ve seen it range anywhere from $450 to a thousand dollars. That’s a huge spread. I mean, 450 to a thousand is a huge spread for having a Quadro done and keep in mind. Let’s, let’s say that you have a couple, uh, you know, you have a 401k, let’s say you have a four Oh three B, let’s say you have two IRAs and we need to do one for each of those that can get expensive. Now we try and mediation, we try to, uh, do some general evaluations and minimize the number of quadrants that we need. But sometimes you need one for each different type, or let’s say, for example, you have a defined benefit plan and you have an IRA.

Matthew Brickman (10:01):
Well, those are two completely different plans. You need two Quadros. So I w what I do with, with, with parties, as I always tell them, here’s six different companies, call them, talk to them. The other thing too, is some of them are small, are more difficult to do than others. Um, I know one of the easiest to do is like Publix, like that. That’s a really easy plan. Uh, Publix already has it set up in internally. So when they submit the quadrant, everything’s really simple. I’ve seen where some other companies, it’s more difficult to really, you know, do those things. And that can also, you know, depend on the cost. It depends if you’re doing, uh, say a Florida retirement system versus an IRA. Um, so again, you know, shop it out. Um, but yeah, um, there there’s, there’s a cost associated with it. That is a post-marital.

Matthew Brickman (10:58):
And sometimes, um, I can see that you have possibly another question. So I’m going to, I’ve got to jump in. Maybe I’m going to answer this is who pays for it. You know, so generally the parties split it equally because it’s just one of the things that has to be done. Sometimes the receiver is the one paying for it because they’re the one that they want it. But if there’s a disparity in the income, well, then sometimes it’s the payer. So, you know, if, you know, if the husband makes a whole bunch of money and the wife doesn’t make much will, so the wife can get it. Maybe the husband will pay for it, but that’s also why I suggest shop it around.

Sydney Mitchell (11:38):
Right. Well, my question was going to be who is responsible for identifying this person, getting everything going.

Matthew Brickman (11:47):
So, so, um, so we take care of that in the mediation agreement and being that. So really whoever has the plan is responsible for contacting cause they’re the ones that have to get all the documents to that person. Right? We build that into the plan that like within 10 days of the entry of the final judgment for disillusion of marriage, you know, Bob is going to contact the Quadro experts, provide all the necessary documents, pay, uh, the required fee to initiate, um, the Quadro and sometimes Sydney too, as I’m thinking about it, sometimes what people will do is they will get all the documents, find the Quadro expert, get all the documents to them. So all the analysis is done prior to the divorce. The only thing is the Quadro expert cannot enter the Quadro until they are officially divorced, but they could give all the documents. So the entire analysis is done, which speeds up the process. Because as soon as they’re divorced, they’re just entering it. The judge assigned it off on it, money’s being transferred. Um, so that then they’re not getting divorced and then having to get it to them and maybe taken another 30 days, however long it takes for the Quadro expert.

Sydney Mitchell (13:05):
Right. I think, I think we’re, I think I’m starting to see, I mean, obviously, you know, through all of our conversations have seen this, but there are so many parts and pieces to this process that nobody would have any idea that they’re going to have and hold responsibility for when getting a divorce. So this is, again, I think one of those things, you know, it’s like, who knew about this? I didn’t,

Matthew Brickman (13:27):
Yeah. I mean, you know, and, and that’s why, you know, for example, when I got divorced in a one, we did not own a home. I did not have a business, did not have any retirement. So it was pretty simple. What are we doing with the apartment that we’re renting with the cars that we don’t own, because we’re still making payments to the bank and what are we doing with all of our used furniture? Well, that’s pretty simple, right? We’re not needing to know all of this stuff. I didn’t have a business, like, okay, well, what about business evaluators? And

Sydney Mitchell (14:03):
That’s gotta be, it’s an entirely different world though.

Matthew Brickman (14:06):
For me, it was simple. It’s like, okay, well, like, okay, what do I want Sydney? Basically what I took from my divorce was I wanted edit, you know, maybe typical guy. I don’t know. I took my computer. I took my satellite dish, let me through my clothes. Um, and I took my car and that was it. I’m like, you know what, just give me my electronics and my clothes. And I’m good to go. Other than that, I can rebuild. Uh, but, but yeah, I mean, you know, we, do you have things when you have a business, when you’ve got retirement, there’s a lot more pieces.