Many people are disheartened to hear how costly a divorce can be. A lifetime of earnings may be up for grabs and the fear of going into retirement with nothing looms overhead.

In Texas, the division of retirement accounts during a divorce depends on a number of factors about the marriage and how it ended. A Collin County divorce attorney like J. Ryan Nordhaus at Nordhaus Walpole PLLC can help explain how the courts make decisions and what the process will be after the decisions are made.

Is a Retirement Account Community Property in Texas?

Texas family law courts assume all property is community property during a divorce unless one party can show a preponderance of evidence that the property is separate. This includes retirement accounts as defined by the Internal Revenue Service, such as 401(k)s, IRAs, Roth IRAs, employer stock ownership plans and others.

Essentially, if you can prove something was yours before the marriage, it is likely to remain yours after the marriage. In instances of inheritances or gifts to only one spouse, that property may remain separate, too.

It is crucial that you discuss the nature of your retirement accounts and when and how you obtained the value of each with your divorce lawyer. If there is a legitimate way to show that something is separate or community property, it is important to your case to make sure the judge knows it.

Equitable Distribution of Retirement Accounts

In Texas, division of property follows a standard called equitable distribution. The judge divides the property based on what your divorce lawyer — and the opposing attorney — convince him or her is “just and right.”

This is rarely a 50/50 split. Factors that influence equitable division of retirement accounts include who is to blame for the marriage breaking up; disparity in earning power between the spouses; the education, future employability and health of each spouse, custody responsibilities and others.

Dividing Retirement Accounts After Divorce

There is an additional process to distributing retirement accounts after divorce. In addition to the final decree, the judge signs a Qualified Domestic Relations Order.

The United States Department of Labor outlines the order as a means of creating an alternate payee’s right to benefits of a retirement account. In other words, this is the paper that says a former spouse has a right to part of the other former spouse’s retirement accounts.

Each state has a right to govern these independently. In Texas, once the order is signed by the judge, a retirement plan administrator distributes the funds. Cash accounts like 401(k)s may be disbursed in 30 to 90 days. Other non-liquid accounts may be transferred to the new owner’s name in that timeframe.

At Nordhaus Walpole PLLC, we are available to make this process as favorable and easy for you as the law allows. Talk to our divorce lawyers to learn more about how we can gather evidence of property ownership and develop strategies to streamline the distribution of retirement accounts.