Division of Retirement Funds in Divorce in Texas
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Division of Retirement Funds in Divorce
A lot of individuals save for retirement during their professional lives, anticipating that such funds would provide financial assistance after retirement. However, in cases where married couples divorce, their retirement funds are frequently deemed communal property and are subject to division as per the court's discretion.
How the Texas Courts Treat Property in Divorce Cases
Texas follows the community-property doctrine, which implies that any property obtained by either spouse throughout the marriage is deemed equally owned by both parties. This encompasses real estate, earnings, and retirement funds, while assets classified as separate property through a prenuptial or marital agreement, personal injury compensations that do not represent lost wages, gifts, and inheritance are excluded. As per the Texas Family Code, during divorce proceedings, the courts will allocate community property in a fair and equitable manner, while the separate property of each spouse will usually remain separate.
Dividing Retirement Funds in Divorces
Retirement funds refer to money contributed to 401Ks, IRAs, pensions, deferred compensation accounts, and other retirement plans. If all contributions in a retirement account are made or accrued after the date of marriage, both spouses are likely to be considered as joint owners of the community property, regardless of whose name is on the account or whose income contributed to the account. Conversely, if the funds were deposited before the marriage date, they will be considered separate property.
As most individuals initiate retirement savings before marriage and continue contributing throughout their married life, retirement funds often include separate and community property. Therefore, dividing retirement funds can be complex in Texas divorces, requiring the assistance of forensic accountants and other experts to testify on the value of separate and community property.
Speak with an Experienced Divorce Attorney
The attorneys at Wilson Whitaker Rynell have extensive experience in handling divorce cases. By retaining our services, we will prepare compelling arguments on your behalf to increase the likelihood of obtaining a favorable outcome. Our firm represents clients in divorce cases in various Texas cities, including Dallas, Austin, Houston, Fort Worth, and all cities within Dallas County, Tarrant County, Collin County, and Denton County.
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Dividing Retirement & Pensions in Divorce
The first step in splitting retirement accounts will be to calculate the value of the account compared to the entire marital estate value.
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