How Are Retirement Accounts Divided?

As a community property state, all income and assets acquired during a marriage must be divided equally in divorce. The rule includes income on securities or separate property that was earned during a marriage. However, property acquired through gift or inheritance is excluded. Assets may also be legally excluded according to a valid prenuptial agreement. Property division, then, requires an inventory and valuation of all assets and debts in the marital estate.

Attorney Georgia Barker can ensure that your community property, including retirement assets, is divided fairly and accurately under Texas law. Our main office is in Sugar Land, Texas, and we offer consultations by appointment in Katy and Bellaire. Call 713-205-7573 to talk to a lawyer today.

Helping You Classify Your Retirement Assets

You may have questions about whether an asset that you owned before your marriage, such as a retirement account, must be included within the inventory of the marital estate. In Texas, the court will apply the inception of title rule to classify an asset as separate or marital. The rule examines the status of the asset at the time you acquired it. If you held a separate title to an asset before the marriage, that classification would remain.

Retirement Assets May Be Community Property

That analysis becomes more complicated for contributions made during the marriage to separately owned property. For example, if you contributed to your 401(k) or IRA account during the marriage, your spouse might be entitled to a proportionate share. The value of a 401(k) account also must be adjusted to account for taxes on the distribution when it is paid. Your spouse's share may be swapped for other assets, such as the home, but remember to factor the tax implications into your calculations during these property division negotiations.

Protecting Your Rights With A QDRO

At Barker Law Firm PC, we have over 20 years of experience helping clients get answers to complicated property and retirement account questions that may arise in divorce. One strategy that we often recommend is a qualified domestic relations order. A QDRO is a court order that legally describes how retirement account assets will be distributed. After the court approves the QDRO, a copy can be distributed to your plan administrator.

We Can Help You Divide Your Retirement Assets

At Barker Law Firm PC, we know how to protect your rights during property division negotiations. Call 713-205-7573 or contact us by email.