25 Nov What to Know About Divorce and Retirement Accounts in Texas
When people think about divorce, they often focus on the house, cars, and bank accounts. But for many couples, retirement savings are one of the biggest assets they own. These accounts can include a 401(k), pension, IRA, or other long-term plans. Understanding how retirement accounts are divided in a Texas divorce is important because it can affect your future financial security.
At Navarrette Family Law, we help families understand their rights and avoid costly mistakes. Here is what you need to know about retirement accounts during a divorce in Texas.
Texas Is a Community Property State
In Texas, most property gained during the marriage is considered community property. This rule also applies to retirement savings. This means the portion of a retirement account earned during the marriage may belong to both spouses, even if the account is in only one person’s name.
For example, if one spouse contributed to a 401(k) while married, the amount saved during the marriage is usually community property. The part saved before the marriage may be separate property.
Knowing this difference helps determine what each person may receive.
You May Need a QDRO
Some retirement plans require a special court order called a QDRO. This stands for Qualified Domestic Relations Order. A QDRO tells the plan how to divide the retirement account between spouses.
Not every plan needs a QDRO, but many do, such as pensions and 401(k) accounts. If your case requires one, it is important to file it correctly so the division is handled without penalties or delays.
IRAs and Other Accounts Work Differently
IRAs do not use QDROs. They are divided by a process called a transfer incident to divorce. This needs to be done carefully to avoid unexpected taxes or errors.
Other retirement accounts, like military or government plans, have their own rules. Talking with an experienced attorney can help you avoid mistakes that might affect your retirement.
Tracking Separate Property Matters
If part of a retirement account was earned before the marriage, that portion may be separate property. This means it belongs only to one spouse. To prove this, you must show account statements or other documents that trace the separate amount.
Many people do not track this information, which can lead to confusion or loss of separate property. Keeping clear records makes the process easier and helps protect what is yours.
Get Help Protecting Your Future
Dividing retirement accounts can feel confusing, but you do not have to navigate it alone. Our team at Navarrette Family Law works with clients to protect their financial future and ensure property is divided correctly under Texas law.
If you are facing divorce and have questions about your retirement savings, we are here to help.
Schedule a consultation today and let us guide you through each step with clarity and care.