QDROs, Pensions, and 401(k)s in Texas Divorces

Austin and Travis County Retirement Account Divorce Lawyers

For many couples, the most valuable asset subject to division in a divorce is their retirement fund. Under Texas law, if a pension or 401(k) is earned during the marriage, it is considered community property and both parties are entitled to receive a portion of it. Actually dividing a retirement plan between divorcing parties, however, is not simple. At Powers Kerr & Rashidi, PLLC, we are experienced in helping clients prepare the paperwork necessary to implement court-ordered divisions of retirement funds. Our attorneys work hard to ensure that our clients receive all of the benefits they are entitled to receive as a result of their divorce.

Qualified Domestic Relations Orders and Pensions

Pensions are retirement funds that provide a set payout amount to an employee beginning upon the employee's retirement. The amount of the payout is typically determined by the employee's salary during, and length of, employment. Pension plans can be structured in a variety of ways, and understanding all of the possible options that the plan allows is essential to maximizing what the pensioner might receive. Our attorneys are familiar with working with pension plans and how to secure effective Qualified Domestic Relations Orders (QDROs), which are used to divide pensions as part of a your divorce settlement, on behalf of their clients.

Dividing 401(k) Accounts Effectively

Defined contribution plans, including 401(k) plans, are another type of retirement fund in which contributions grow through tax-free interest until they are needed in retirement. Typically, these funds cannot be liquefied without a tax penalty until the beneficiary reaches retirement age; in a divorce, however, such funds can be transferred between the divorcing spouses without penalty. As with pensions, QDROs are used to specify the terms of how the plan will be divided, and the company that manages the 401(k) will require a QDRO before it can give a portion of the plan to a non-employee person.

At our firm, we have years' worth of experience in handling divorces that include the division of retirement fund assets. We understand how retirement plans work, how they are valued, and how to successfully negotiate or litigate a fair resolution for their division.

To learn more about the property division process and how it relates to retirement funds, call 512-610-6199 or contact us online to schedule a consultation. Located in Austin, our firm serves clients throughout Central Texas.