PLEASE NOTE: We are still open and operational! To protect your safety in response to the threats of COVID-19, we are offering our clients the ability to meet with us in person, via telephone or through video conferencing. Please call our office to discuss your options. click here for Covid 19 updates
Laura Dale & Associates, P.C.
713-574-7952

Dividing pensions and retirement accounts in a divorce

The number of divorces involving couples over the age of 50 has soared in Texas and around the country in recent years even though the overall divorce rate has remained fairly stable. Spouses going through a gray divorce often have significant marital estates, and negotiations over how these assets should be divided can become contentious. This is especially true when retirement funds that have taken years or decades to amass are being discussed in states with strict community property laws.

The government encourages workers to save for retirement by offering them tax benefits. When employee retirement plans are divided in a divorce, a Qualified Domestic Relations Order must be used to ensure that benefits provided by the Employee Retirement Income Security Act are not lost. Funds from defined contribution plans like 401(k) accounts can usually be rolled over without incurring any tax consequences. Distributions to former spouses made using a QDRO are rarely penalized even when the recipient is younger than 60 years of age. Funds placed into an IRA account can also be rolled over, and a QDRO is not required to divide them.

Dividing pensions in a divorce can be a complex process because placing a current cash value on future benefits is difficult, and any contributions made before the divorcing couple married are considered separate property. A QDRO can divide the agreed value of a pension plan with a lump-sum payment or require the benefits to be shared when they are paid. In some situations, the court may decide to address this issue at a future date.

Family law attorneys with experience in high net worth Texas divorces may suggest approaching these issues proactively by drafting a fair prenuptial agreement. Attorneys may also recommend consulting with retirement experts, tax accountants and financial planners before making these decisions.

No Comments

Leave a comment
Comment Information
  • TAOFLS
  • Board Certified
  • IAFL
  • Super Lawyers 2019
  • Best Lawyers
  • Avvo Rating
  • Avvo Rating
  • Avvo Client Choice 2014
  • Avvo Client Choice 2014
  • Best Law Firms Badge
  • Laura Dale
  • Texas Bar Today Top Ten Badge

Contact Our Experienced Team Today

Se Habla Español | Nous Parlons Français

Due to the experience our lawyers have in many specialized areas, you can rely on us to put together the right team to handle your case, even if it centers on complex issues such as international family law, business valuation or bankruptcy. Contact us today to make an appointment to discuss your needs with a knowledgeable lawyer.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Laura Dale & Associates, P.C.
email us for a response

OFFICE LOCATION
1800 Saint James Place
Suite 620
Houston, TX 77056

Phone: 713-574-7952
Fax: 713-600-1718
Houston Law Office Map

Review Us