In a divorce, everything that is considered marital property will ultimately
end up on the chopping block, subject to division. This also includes
your 401(k) plan, pensions, and other retirement accounts. However, only
the amount you contributed to the account after your marriage will be
considered marital property. For example, if you have a total of $100,000
in one account and $30,000 of that amount was accumulated prior to your
marriage, only $70,000 of it would be divvied up between you and your spouse.
Dividing Your Retirement Assets
When it comes to dividing something like a 401(k) plan, you should understand
that there are multiple options. You could decide to keep the entirety
of your account and, in exchange, allow your spouse to take other marital
assets that have a comparable value to what they would have received if
your retirement assets were divided. When making a decision, you will
want to consider the long-term tax consequences and the current and long-term
value of the assets.
If you and your spouse would rather split the retirement assets instead
of trying to hash out what other marital assets you are comfortable parting
with in exchange for keeping the entire sum of those assets, you will
need what is known as a Qualified Domestic Relations Order (QDRO), which
creates the right for an alternate payee to receive all or part of a retirement
account. When you retire and become eligible to receive funds from your
retirement accounts, your spouse will also likely be eligible for distributions.
Family Law Attorneys in Houston
If you and your spouse are going through a divorce and encountering complex
legal matters such as the division of your retirement accounts, you will
need skilled legal assistance on your side. At the Law Office of Kathryn
Marteeny in Houston, our
family law attorneys are backed by over 30 years of experience and is dedicated to
assisting clients navigate numerous family law matters. You should not
have to go through this difficult time on your own.
Get started on your
divorce case today and
reach out to our law firm at (713) 936-2300 to schedule a consultation with a knowledgeable
member of our team.