Dividing Retirement In A Divorce
Retirement accounts are often a secondary consideration for couples who are splitting up. Oftentimes, one or both spouses have little idea how their own retirement planning is progressing or functioning, so the division of these assets is overlooked as they consider how their assets will be split.
These accounts and investments can be quite valuable, however, and must be included in the division of community property. To divide these accounts, you need an attorney equipped with the experience and understanding of retirement planning who can accurately value the accounts. There are also complex tax issues that must be included in the final evaluation of the account’s worth.
How Are Retirement Accounts Divided?
At Fabio & Merrill in Houston, our lawyers have the experience and knowledge to handle the division of any type of retirement account that you or your spouse may hold. For more than 35 years, we have protected the interests of our clients, ensuring that each is awarded what he or she is owed in the division of property.
Most retirement accounts are either defined benefits plans, such as a pension, or defined contribution plans, such as a 401(k). To value the account, you must understand how it functions, how it is taxed and if the employer makes contributions. All contributions, both by the employee and the employer, should be evaluated to determine if they were made before or after tax. This will affect the current value of the account and how much will be awarded to each spouse.
Our attorneys will also help you understand the tax ramifications that could be applied if funds are withdrawn from the account early or if the account is divided. It is in the best interest of the client to explore alternatives that will shelter the accounts from costly taxes.
We work with trusted professionals and experts in the division of benefits and preparation of Qualified Domestic Relations Orders (QDROs), ensuring that all other issues are fully resolved in the best interests of our clients.