Is divorce in your future? If so, like many men you may not feel the emotional impact of the divorce right away. Initially, your biggest concern may be the financial repercussions of the divorce. If you have been working and planning for your retirement for many years, one of your worries may be the status of your retirement assets and benefits. To provide some general guidance, Fort Worth father’s rights attorney Jon Boyd explains what retirement benefits your wife may be entitled to in a Texas divorce.
Pension and retirement accounts are typically considered marital assets in Texas, meaning they are subject to division during a divorce. If you had the account prior to the marriage, any contributions you made before you were married will likely remain your separate property. If you and your spouse are unable to reach an amicable agreement, a judge will decide what portion of the pension/retirement account is marital property and what percentage of that each spouse receives.
In the case of a pension, however, the pension rules may also play an important role. For example, government and military pensions include standard rules dictating how long the two of you have to be married in order for your spouse to make a claim. If the pension is divided during the divorce, your attorney will likely need to prepare a Qualified Domestic Relations Order, or QDRO, which is a legal document specifying who will receive what from the pension and when they are entitled to receive it.
A 401(k) or Individual Retirement Account (IRA) is likewise generally considered a marital asset subject to division in a divorce; however, each 401(k) plan has its own set of benefit provisions and administrative rules which can complicate the process of dividing the assets held therein. Some plans divide earnings by percentage, for instance, while others divide by shares. Moreover, your plan may permit a distribution of your spouse’s portion at the time of the divorce or may require recipients to wait until retirement to access the funds.
In Texas, a judge considering how to divide retirement benefits will use the following formula to help decide how much each spouse receives:
The value of the retirement benefits.
The portion of that value which is “community value.”
And, the percentage of that community property that each spouse is entitled to as part of a fair and just division.
If the court does award your wife a portion of your pension and/or retirement account, you do not necessarily have to withdraw the funds from the account. You may be able to leave the account as is and substitute another marital asset of equal value. Your attorney will discuss the options available for complying with the court’s order with you.
If you are divorced, your ex-spouse can receive Social Security benefits based on your record (even if you have remarried) if:
Your marriage lasted 10 years or longer.
Your ex-spouse is unmarried.
Your ex-spouse is age 62 or older.
The benefit that your ex-spouse is entitled to receive based on their own work is less than the benefit they would receive based on your work.
You are entitled to Social Security retirement or disability benefits.
Social Security benefits are not something that must be addressed and divided during a divorce as the rules that apply to them are governed by the federal government. In addition, keep in mind that the amount of Social Security benefits your divorced spouse gets has no effect on the amount of benefits you or your current spouse may receive.
If you are contemplating a high asset divorce and you are worried about how your pension or retirement account will be handled, contact an experienced Fort Worth father’s rights attorney at Boyd Family Law to schedule your appointment today.