For many couples, asset division is the most contentious aspect of divorce other than child custody. It’s relatively common for one spouse to try to hide assets to avoid sharing fairly. It’s also common for one or both spouses to fight for more than a fair share of marital assets. Certain assets, like retirement accounts, are often held in only one person’s name. That doesn’t mean that those assets aren’t still meant to be equitably divided during a divorce.
Texas is a community property state. Unless you and your spouse agree on asset division before you go to court, the courts will attempt to split the assets evenly. A variety of factors, including child custody, earning potential, physical or mental disabilities and if your divorce was fault-based, could impact the division of your assets. Typically, only assets acquired during the marriage get split. When it comes to complex financial assets, like retirement accounts, that practice can make the division process a little more complicated for everyone involved.
Retirement division depends on timing, not who made deposits
It is common for only one spouse to contribute to a retirement plan. Sometimes this is because one spouse stays at home. Other times, it’s because one spouse has an employer-matched retirement account that offers better benefits. If you aren’t the holder of the retirement account and funds were never deposited from your pay, that doesn’t mean your spouse simply keeps the retirement account.
The funds in the retirement account will typically get split based on when the deposits occurred, not who made them. For example, if the account already existed prior to your marriage, earlier deposits likely won’t get considered for distribution. Any deposits made during the course of your marriage will very likely get split evenly between both spouses. Even if you were a stay-at-home parent who didn’t bring any money into the home, your work and efforts made it possible for your spouse to work a high-paying job without incurring expenses for child care, food preparation and house work.
The courts in Texas recognize these contributions and will make every effort to fairly and evenly split retirement accounts, along with any other marital assets. If your retirement account is split as a result of a divorce decree, you don’t necessarily need to incur fees or penalties for early withdrawal from your 401K or Roth IRA retirement account.
An attorney can help ensure a fair division of assets
You deserve an equitable division of assets accrued during your marriage. Working with an experienced lawyer who understands Texas community property and divorce laws can help ensure that everything gets handled properly. Your attorney can help you fight for the best possible outcome to your divorce, including the division of assets.