A divorce may involve a review of your long-term financial goals and possibly making some lifestyle changes. Because Texas laws consider income and assets earned during marriage as community property, the court may order a division of a retirement fund.
Texas residents could experience some discomfort when considering they may need to liquidate their financial accounts and give half to their ex-spouses. SmartAsset.com, however, reports that judges consider different factors that may influence how couples divide their property. You may not end up leaving your marriage with exactly half of your assets, but you may take your fair share.
What issues may impact property division?
Judges may look at how long a marriage lasted and the value of the community property. Age, health or medical conditions could affect whether an asset needs dividing to fund a retirement. Individuals closer to retiring may also decide to sell their home and split the net proceeds.
If you own separate property such as a gift or an inheritance, it belongs to you and does not divide during divorce. Your separate property’s value, however, may influence how much of a shared retirement fund or pension plan you receive.
How much of a retirement fund could divide?
The current market value of a 401(k) balance determines how much value may divide in a divorce. Kiplinger’s Personal Finance notes that a judge must issue a qualified domestic relations order to liquidate a 401(k) fund. By obtaining a QDRO, a spouse’s fair share of the fund may transfer to his or her individual retirement account.
Under certain conditions, your soon-to-be ex-spouse may have an option to request a greater portion of your community property. Dividing a retirement fund or other financial accounts could, however, still provide ample income to support your new single-person household.