Getting a divorce can be a complex and stressful process, and there are a variety of issues that will need to be addressed before a marriage can be legally dissolved. Many of these issues will be related to the property division process, and disputes can arise between spouses about who should get what pieces of property or who will be responsible for certain debts. Of the different types of complex property issues that may need to be resolved, determining how to divide assets such as retirement savings accounts or pension benefits can be especially complicated. It is important for spouses to understand the applicable state laws that address the division of assets and the steps they can take to protect their financial interests.
Texas Law on Dividing Marital Assets
Under the Texas Family Code, all property acquired by either spouse during a couple's marriage is considered to be community property that is subject to division in a divorce. This includes any funds saved in retirement accounts or benefits that were earned during the course of the marriage. In Texas, all marital property is subject to “equitable division.” This means that the court will divide property between spouses in a manner that is considered to be "just and right." To determine how property should be divided, a variety of factors may be considered, including each spouse's age, health, earning capacity, education level, job-related skills, and more. Assets will not necessarily be divided 50/50 between the two parties; instead, the court will look at each party's individual situation and determine a way to divide assets as fairly as possible.
Retirement Assets and QDROs
Retirement accounts are considered marital property in Texas, and thus, they must be divided alongside other property during divorce proceedings. Retirement assets that may need to be addressed include 401(k)s, pension plans, IRAs, stock options, annuities, and deferred compensation plans. The ways these assets may be divided can vary depending on a couple's individual situation. For example, each spouse may maintain ownership of a 401(k) or IRA that is in their name, but if one spouse's account has a higher balance, some of the funds in their account may be transferred to the other spouse.
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