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What happens to retirement savings in a Texas divorce?

On Behalf of | Feb 13, 2024 | Divorce |

In Texas, divorcing spouses usually divide retirement savings to some extent. That is, unless a prenuptial agreement says otherwise.

Usually, though, the spouses may have to divide assets accumulated in retirement accounts during the marriage. This can be true even if the account is in only one spouse’s name.

Fair division considerations

While an equal division may seem straightforward, various factors may warrant one spouse receiving a larger portion. For instance, if one spouse contributed significantly more to the retirement accounts or if one spouse gave up career opportunities to support the other’s career or raise children, a fair division might involve an adjustment in the allocation of retirement assets.

Qualified Domestic Relations Order

A QDRO is a legal document that outlines the division of retirement benefits between divorcing spouses. It allows for the transfer of funds from one spouse’s retirement account to the other’s without incurring early withdrawal penalties or tax consequences. A QDRO can facilitate the fair and efficient division retirement savings in accordance with the terms of the divorce settlement.

An experienced divorce lawyer’s guidance

Navigating the complexities of dividing retirement savings and other investments in a divorce can be challenging. Consulting with a knowledgeable professional can provide valuable insight and guidance. An experienced divorce lawyer can help assess each spouse’s financial situation, negotiate fair terms and ensure the fair division of all assets, including retirement savings.

Divorce can have a significant impact on your financial well-being, particularly in terms of retirement planning. By exploring the options for dividing assets, including retirement savings, you can start moving forward with your life.