When it comes to community property in Texas divorce, retirement benefits are included in the list of assets that are divided equally between the spouses. This means that if you are going through a divorce in Texas, you will likely have to split your retirement benefits with your spouse.
In the video, Atty. Tyler Monahan of Turner-Monahan, PLLC, gives us a general overview regarding how retirement assets are treated during a divorce. In addition, he provides us clarity regarding the terms “50-50” and “just and right”, which are commonly used during such situations.
Since divorce and asset division cases can be very sensitive and have a lot of intricate details, it will be helpful to have the assistance of a professional. Contact the Turner Monahan firm to speak to an attorney. All case evaluations and suggestions our attorneys make are in the light of Texas Family Law.
Types Of Retirement Benefits
Retirement benefits include:
- Pensions
- Deferred compensation accounts
- 401(k) accounts
- Individual Retirement Accounts (IRAs), and
- Other retirement savings plans
Will Your Retirement Assets Be Divided During A Divorce?
Whether or not your former spouse is going to have an interest in the above-mentioned benefits is going to be determined upon whether or not you reached an agreement mediation and decided they were going to be allocated some portion.
In other cases, it can be true if the court has decided after a trial that they’re going to divide that retirement, defined benefit piece, and annuity piece and provide the other party with some interest in it.
The final decision is based on the facts such as the length of the marriage. Plus, the court will also look at the assets and the debts being divided. So the entire process is very fact-intensive on what’s going to happen.
You must know that in the state of Texas, anything acquired during a marriage is considered to be a community asset. And it’s divided what’s called on a “just and right” basis.
The common understanding of community property is “50-50”; however, it’s incorrect as it’s always just and right. It can be determined by what the parties agree to, or it can be determined by the court.
Community Property Vs. Separate Property
In Texas, there are two types of property: separate property and community property. Separate property belongs to one spouse alone, while community property belongs to both spouses equally.
The vast majority of assets acquired during a marriage will be considered community property, including retirement benefits. However, there are a few exceptions, such as if one spouse already had the asset before marriage or if it was designated as separate property in a prenuptial or postnuptial agreement.
50-50 Vs “Just And Right”
In a Texas divorce, retirement benefits can be divided in one of two ways: 50-50 or “just and right.” The 50-50 option means the benefits will be split evenly between the spouses. The “just and right” option takes into account a number of factors, such as the length of the marriage, each spouse’s income and contribution to the retirement account, and the age of each spouse.
Which option is best for you will depend on your specific situation. If you have been married for a long time and one spouse has significantly more income than the other, then the “just and right” option may be a better fit. If you are looking for a simpler and more straightforward solution, the 50-50 option may be better.
Regardless of your choice, it is essential to remember that retirement benefits are considered community property in Texas and will be divided equally between the spouses in the event of a divorce.
The Matter Under Texas Family Code
If you are going through a divorce in Texas, it is important to be familiar with the state’s family code. This code outlines the rules and regulations governing family law in Texas. In addition, the section on divorce specifically addresses the division of assets, including retirement benefits. By knowing what to expect, you can ensure that your divorce goes as smoothly as possible.
Here are some of the statements that are related to retirement and asset division:
Sec. 7.001. GENERAL RULE OF PROPERTY DIVISION:
“In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.”
Sec. 7.003. DISPOSITION OF RETIREMENT AND EMPLOYMENT BENEFITS AND OTHER PLANS:
“In a decree of divorce or annulment, the court shall determine the rights of both spouses in a pension, retirement plan, annuity, individual retirement account, employee stock option plan, stock option, or other form of savings, bonus, profit-sharing, or other employer plan or financial plan of an employee or a participant, regardless of whether the person is self-employed, in the nature of compensation or savings.”
Are you getting divorced? It is crucial to have as much information as possible. For instance, if you were served divorce papers, here is what you should do next. In addition, if you have children, you will likely face a tough custody situation. Check out if laws are different for mothers and fathers during a custody hearing.
Hire An Experienced Texas Family Attorney
If you are getting divorced and have questions about how your retirement benefits will be divided, it is important to speak with an experienced Texas family law attorney. They will be able to advise you of your options and help you protect your rights during the divorce process. Schedule a free consultation with attorney Tyler Monahan to discuss your case details.
In addition, check our website for more information about our services. Go through our blog to find out relevant details regarding your case. There is tons of content on divorce and answers to unique questions like What NOT to do During Your Divorce: How Your Social Media Use Is Hurting Your Divorce?
More Questions Regarding Divorce
Divorce cases are complex, so you will have many questions. To save you time and hassle, here are some topics that revolve around the area. For more information, contact our firm, Turner-Monahan, PLLC.
- When I get divorced, do I have to go to court?
- What is a no-fault divorce?
- What is a default divorce, and how does it occur?
- What will happen to my house during a divorce?
- I’m moving out before the divorce is finalized. What can I take with me?
Disclaimer
The commentary and opinions are for informational and educational purposes only and not to provide legal advice. You should contact an attorney in your state to obtain legal advice concerning any particular issue or problem. You can become a client and enter the attorney-client privilege only after hiring Turner-Monahan, PPLC, by signing a written retainer agreement.
