Dividing up your assets can be one of the trickiest parts of getting a divorce. You and your former spouse may have very different ideas about what is fair. Various factors could impact your expectations, such as who earned more or whether there was an issue with infidelity in your marriage. Confusion about divorce abounds, as there seem to be a lot of tall tales and exaggerated stories regarding how asset division got handled by divorce courts. Texas laws about divorce make it clear that assets should get divided fairly, but not necessarily evenly.
Retirement accounts are one kind of asset that many people find confusing during a divorce. If the account is only in your name and you opened it before you got married, why should you have to split it with your spouse? Generally speaking, retirement accounts that you invested in during your marriage will get treated as marital property for the purposes of asset division. Even if your spouse didn’t work and never contributed to your retirement account, he or she will likely receive at least half the value of accrued assets in the account during your marriage.
Texas cares about when deposits happened, not in whose name
Regardless of who earned what, any income or new assets acquired during your marriage will get considered as marital property. Deposits made before your marriage will generally get treated as your personal property. Anything deposited during the marriage will likely get split.
This doesn’t mean the funds have to come directly out of the retirement account. The accrued balance can get factored into your list of assets and debts. In some cases, for example, your spouse may accept the same value in equity in your marital property instead of funds directly from the retirement account.
If the actual retirement account will get split, a court order in the form of a divorce decree will help you. You can legally split Roth IRAs and 401K accounts without taxes, penalties or fees if you do so as part of a divorce. These specialized transactions require both special forms and a court order. Your Roth IRA can get split using a transfer incident to divorce. You can split your 401K via a “Qualified Domestic Relations Order” (QDRO). Doing so can quickly become complicated, so consider obtaining the help of an experienced Texas divorce attorney.
Fight for a fair division of assets
Whether you’re filing paperwork to divide your retirement account or creating an exhaustive list of your assets and debts, working with an experienced lawyer can make a big difference. Your lawyer can help you understand what outcome to expect and can advocate for you during every step of the process.