Who Keeps the Retirement Benefits in a Divorce?

TexasLawHelp.org explains that, as a divorcing Texan, you may rightly consider your retirement benefits to be one of your most valuable assets. Concern about losing access to hard-earned retirement security is certainly warranted, particularly if you are facing gray divorce.

Texas law does not uniformly consider retirement benefits to belonging to both spouses, and the law can be complex when accounting for all relevant factors.

Type of retirement

One of the primary factors in the retirement benefits division is the type of benefit in question. Retirement benefits in Texas include 401(k)s, deferred compensation accounts, Individual Retirement Accounts, pensions, and other retirement savings plans.

Many of these come with certain rules and requirements. For instance, Social Security and military retirement benefits require couples to have been married for at least 10 years before they include the non-earning spouse. Other requirements may apply, such as a certain number of years a partner was in service while the marriage lasted.

Retirement benefits division

Generally, Texas will divide retirement benefits according to the same set of rules governing other property divisions. Texas is a community property state, meaning that it recognizes all property either partner acquires during the marriage as belonging to both spouses.

Any property you brought into the marriage, acquired after the marriage, or acquired as an individual gift or inheritance is separate property so long as you kept it sufficiently distinct.

Thus, all retirement contributions during the marriage belong to both spouses equally — regardless of who made those contributions. Contributions you made before or after the marriage may be separate property, but commingling them with the joint property may compromise this distinction.

Courts in Texas will divide community property, including retirement accounts, fairly according to the presiding judge’s discretion. The law does not require courts to divide benefits equally, and other factors may result in one partner receiving a larger share.

You and your spouse may choose to negotiate an agreement you can both live with rather than leaving these decisions up to court. As long as there are no glaring concerns in the agreement, a judge will most likely approve it.

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