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TX divorce lawyerOne of the most common points of contention in any divorce is how a couple’s assets will be divided upon dissolution of their marriage. Although most couples understand that this will involve dividing relatively common assets, such as bank accounts, the family home, and vehicles, it’s important to remember that more unusual property, like retirement accounts, will also need to be divided. In most cases, at least some of the contents of a retirement account are considered marital property, which means that they must be divided equitably between the spouses. While this could mean that each spouse receives an equal share of the benefits, this is not always true, as courts are generally guided by what would qualify as equitable distribution when making their decisions.

Whether your retirement account pays out on a regular basis or you can withdraw as you see fit depends in large part on the type of account in question and the contents of your Qualified Domestic Relations Order (QDRO). To learn more about dividing your own retirement account upon divorce, please contact a member of our high asset divorce legal team today.

What Is a Qualified Domestic Relations Order?

QDROs, or Qualified Domestic Relations Orders, are court orders that lay out the ground rules for how a retirement account will be used following a divorce, including how its contents will be divided. These documents are necessary for most types of retirement accounts, including 401(k)s and IRAs and are used to verify a person’s right to receive a portion of the benefits paid out of a retirement account. Basically, this means that QDROs are used to name a former spouse as an alternate payee upon divorce, even if he or she didn’t actually participate in the plan.

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b2ap3_thumbnail_QDRO.jpgMany high asset divorces require the division of substantial retirement funds, which in Texas, usually involves the issuance of a Qualified Domestic Relations Order (QDRO). These orders, which are issued by a judge, essentially separate and transfer retirement plans between two parties. In fact, the issuance of a QDRO is often necessary before an employer’s pension plan administrator will even agree to divide a retirement account. QDROs contain valuable information, including how the account will be utilized going forward and how its contents will be divided. If you have retirement benefits that were at least partially accumulated during your marriage, you may need to divide those funds with your ex-spouse upon divorce. To learn more about this process, please contact an experienced high asset divorce attorney who can address your questions and concerns.

Dividing Retirement Funds

A party’s retirement funds are not always divisible upon divorce, as courts will usually only order equitable division if funds were accumulated during the marriage itself. Although it depends on the type of account, this means that the retirement funds will either pay out on a regular basis in the future or will be available for withdrawal at the parties’ discretion. It’s also important to note that the only funds that will be subject to division are those that accumulated during the marriage. Funds that accrued prior to the marriage will remain the sole property of the named participant.

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