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How Divorce Affects Retirement Accounts


Many Texas residents who find themselves facing divorce may have questions regarding their retirement accounts. Divorces that include the division of any type of property can be confusing when it comes to how much the law entitles each party to. Unfortunately, a large number of divorces include parties that may not be able to sit down and come to an agreement about how to divide assets such as a pension or 401(k).

According to the Texas Family Code statute under section seven, the court will determine the rights of any joint or individual retirement accounts, regardless of how or when they were funded. While that may sound vague, it means that the judge will have the final say in the disbursement of property during divorce.

Does that mean that the law entitles one spouse to the other’s retirement account during the divorce? Not necessarily. Texas Law Help states that it depends on when the contributions were made. Any contributions made during the marriage are community property and may be subject to division between both parties. Contributions made prior to marriage, however, are separate property, and the judge is not likely to award them to the other party. In the event that there is a disagreement about an account’s property type, spouses must submit proof to determine ownership.

According to the law, the courts should disburse community property between both parties in a way that is just and right. That does not always mean the split will be equal, however. A judge will need to assess a clear financial picture including income and debt to determine how best to divide assets during a divorce.