How are retirement plans divided in a divorce?
Retirement accounts can be a valuable asset, so understandably many divorcing spouses have concerns about what will happen to their retirement accounts in a divorce. Under Texas law, your individual retirement account may, in fact, be community property, and thus subject to division upon your divorce. Our Midland, Texas divorce lawyers discuss some facts you should know about the potential handling of your retirement assets post-divorce.
Retirement Accounts May Be Community Property
Texas is a community property state, which means that most property that has been acquired during the marriage will belong to both spouses. Community property will need to be divided between the spouses during a divorce. Retirement savings accounts are treated like other property in that whatever assets are earned during the marriage in a retirement vehicle will be considered joint property.
Each spouse will have an interest in retirement benefits that have accrued during the marriage. As you approach the divorce, you will want to gather as much information as possible about the retirement accounts. You should find the start date of the account, the most up to date statement, contact information for the administrator, and documentation as to how much was in the account before the marriage.
Some Retirement Assets Are Separate Property
If your retirement account existed before the marriage, then a portion of the assets within it could, in fact, be separate property. Assets owned before the marriage will generally be considered separate property. These assets will remain the sole property of the original owner in most circumstances.
The burden will be on you to prove that you owned the retirement account pre-marriage. You will likely need to obtain statements showing the existence of the account and its balance at the time of the marriage. With this information in hand, your attorney can assist you in negotiating for the fair division of your retirement accounts.
Retirement Accounts Must Be Carefully Divided
Many retirement accounts, like 401Ks, require an additional court order to effectuate the division. A Qualified Domestic Relations Order (QDRO) is transmitted to the retirement plans administrator. It must indicate the date of