When it comes to divorce, there are a lot of questions and uncertainties about how assets will be divided. Retirement assets such as 401(k)s and pensions fall into this category.
What Happens to Retirement Assets During a Divorce?
In Texas, retirement assets acquired before the date of marriage are considered separate property. This means they belong solely to the spouse who earned them and cannot be divided during the divorce proceedings.
However, any retirement assets acquired after marriage can be subject to division under Texas law. If your spouse has a 401(k), IRA, or pension plan, those funds may be subject to division by the court if they were acquired after the date of marriage.
How Are Retirement Assets Divided?
When it comes time to divide retirement assets in a divorce, it is important that you understand what type of plan your spouse has as well as any applicable laws that govern it. For example, 401(k) plans are governed by ERISA (Employee Retirement Income Security Act), which regulates how benefits can be divided. Similarly, pension plans are regulated by PBGC (Pension Benefit Guaranty Corporation).
Your attorney will help you understand how your plan is structured and how it should be divided in the event of a divorce.
The most common way for retirement assets to be divided is through Qualified Domestic Relations Orders (QDROs). A QDRO is an order from the court directing one party's employer or retirement plan administrator to divide their retirement account and pay out certain benefits to both parties involved in the divorce. Your attorney must draft this document carefully so that there are no errors or omissions that could lead to complications down the line.
Divorce proceedings can be complex and challenging when you have complicated assets like pensions or 401(k)s involved in your case. You must understand how these types of accounts work and how they will be divided following Texas law before entering into any negotiations with your ex-spouse or their attorney. By preparing ahead of time and ensuring all documents related to these accounts are up-to-date, you'll ensure everything goes as smoothly as possible during your divorce proceedings.
At Parchman Law Group P.L.L.C., our attorneys are passionate about advocating for our clients as they undergo asset division and prepare for their next chapter. Call us today at (713) 364-0777 to schedule a complimentary consultation with one of our attorneys and learn how we can fight for you.