What You Need to Know About Retirement Account Division
Retirement accounts including 401(k) accounts, pensions, deferred compensation accounts and Individual Retirement Accounts (IRAs) may be part of the community property that will be divided during the divorce process. Spouses are typically required to disclose the existence of retirement accounts to the court and to each other. Also, spouses are usually under an order to not make any withdrawals while the divorce is pending.
If this is a concern for you and there is no order in place, you can file for a temporary restraining order enjoining the spouse from removing money from retirement accounts.
Is Your Entire Retirement Account Community Property?
Only contributions made during the course of the marriage are considered community property. If there were contributions made before the marriage, those sums are separate property.
The type of account also dictates if the sums therein are part of the community. Many retirement savings accounts like 401(k)s and IRAs will be divided regardless of the length of the marriage. However, military retirement, Social Security spousal benefits and pensions have different rules for eligibility.
How a Party Can Keep His or Her Retirement Account
If there is a valid prenuptial agreement in place, it may provide that each party retains his or her own retirement account in the event of a divorce. Also, the parties could agree to each retain their retirement accounts.
If the property division is more contentious, a spouse could “buy out” the interest of the other spouse. For example, a husband could keep his retirement account if he agrees to take community debt equal to the other spouse’s interest in the retirement account. Or the husband could agree to give the wife his interest in a car or home in exchange for keeping his retirement account intact.
What is a QDRO?
You may have heard the term QDRO, which stands for Qualified Domestic Relations Order. This order is from the court and instructs your ex’s employer on how to divide retirement account benefits. A retirement account will not give an ex-spouse the benefits without such an order.
Contract a Richmond, TX Community Property Attorney
Retirement accounts can comprise a large portion of the marital assets to both spouses are entitled. It is important to have a skilled divorce attorney review such matters to make sure that you are getting a fair deal. To schedule a consultation with a Katy divorce lawyer, call the Vendt Law Firm P.L.L.C today at (832) 276-9474 or contact us online.