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Dividing Retirement Funds

Posted on in QDROs, Pensions and 401(k)s

Texas family lawyerCouples who are going through a high asset divorce often experience certain difficulties that are not faced by other couples. For instance, because the parties in these situations have a wide range of assets to divide, the dissolution process can become much more difficult, especially if the couple disagrees about who should retain what property. Dividing retirement funds can be particularly complicated, so if you and your spouse are going through a divorce and you have questions or concerns about dividing the contents of a retirement fund or pension, it is critical to speak with an experienced high asset divorce attorney who can ensure that you receive an equitable portion of your family’s assets.

The Importance of Accurate Record-Keeping

Unlike other types of accounts, retirement funds are not always checked on a regular basis. For this reason, many people forget how much has been contributed to their account at any given time. While this may not cause any serious difficulties in a person’s day to day life, it can become a problem during a divorce when having accurate and extensive records of account contributions can be instrumental in determining who will receive what portion of an account’s funds. This is because how a court divides a couple’s property depends on when the assets were accumulated. For instance, property owned prior to marriage will remain in the sole possession of the party who purchased or received it. Assets accumulated during the marriage, including the contents of a retirement account, on the other hand, will be divided equitably between the couple.

Types of Retirement Plans

How a retirement account is divided also depends on the type of account in question. Defined benefit plans, for example, which are also referred to as pension plans, guarantee that the holder will receive a specific amount upon retirement. In the event that a couple divorces, the ex-spouse of the account holder could be permitted to collect a portion of the present value of the account at the time of dissolution, although he or she could also choose to wait until the account holder’s retirement. This payment usually takes the form of a lump sum award.

Defined contribution plans are divided differently, as these accounts do not pay a certain amount upon retirement, but instead allow a person to reserve funds in a tax-deferred account. The account balance is then multiplied by the percentage of vesting before being divided between the parties.

Call Today to Discuss Your Case with a High Asset Divorce Attorney

If you are going through a divorce and have been unable to reach an agreement with your spouse about how retirement account funds will be divided, please contact The Law Offices of William D. Powers to discuss your case with a skilled Cedar Park family law attorney who is well-versed in the particular issues faced by couples with high assets. We are prepared to assist you today.

 

Source:

http://www.statutes.legis.state.tx.us/Docs/FA/htm/FA.7.htm

The Law Offices of William D. Powers

8911 N. Capital of Texas Highway, Building 2, Suite 2105, Austin, TX 78759