The equal division of assets between spouses is vital to protecting your family’s future in
a divorce. Texas is a community property state. Texas classifies
marital property in two ways
community property and separate property. It is crucial to have a fair division of retirements
accounts. The guidelines that outline how retirement accounts can be divided are complex.
Retirement accounts, pensions, IRAs, ERISA funds, stock plans all fall under community property. It is extremely important to have up-to-date knowledge on all accounts subject to division. If a retirement account was established before marriage make sure to obtain a statement, the month prior to date of marriage to establish what is separate property and what is community property. If the retirement accounts was established during marriage then all the retirement would be community property.
When the agreements have been made on how retirement accounts are to be spilt an attorney must draft and execute a qualified domestic relationships order (QDRO) reflecting the agreements made. A QDRO can be used to divide a variety of retirement accounts, but some most commonly used ones are for 401K, IRA, civil service and traditional pensions.
We also work hand in hand with our servicemen and women when it comes to military pension plans and benefits . We will explain in detail how a domestic relationship order (DRO) may impact your retirement plans through the military.
It takes special care to divide a retirement account properly to avoid costly pitfalls like tax repercussions that will eat away at the total amount you have been awarded. QDRO’s may also raise a host of tax questions. We can refer you to the right dedicated advisors to help ensure your tax liability is limited.
Contact us today to know more about the impact of divorce on retirement and pensions plans and how we can help protect you and your family.