One of the central underlying concepts of divorce and marital property settlement is something called equitable distribution. Equitable distribution, which is required by the Florida Statutes, means that each spouse should receive a fair portion of the marital estate, and each should share in both the marital assets and the marital liabilities. In a recent case, the 4th DCA rejected a trial court’s division of a 401(k) because it unfairly shared the account proceeds between both parties without similarly sharing the financial obligation for the outstanding account loan the couple took out during the marriage.
In 2011, a couple underwent mediation to reach an agreement regarding distribution of their property as part of their divorce. In addressing the husband’s 401(k) account with his employer, the couple agreed that the wife would receive one-half of the “the amount accumulated from the date of the marriage through January 1, 2008.” The agreement also stated that “loans and [withdrawals] taken during the marriage and not repaid will be taken into account for distribution purposes.”
The Qualified Domestic Relations Order (QDRO) the trial court entered, however, stated that the wife’s distribution would “not be reduced by the value of outstanding loans.” As a result, the wife received a payment of $47,505, while the husband’s remaining balance, which factored in an outstanding loan in excess of $30,000, stood at less than $13,700.
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