Texas couples who are divorcing must divide financial assets such as retirement accounts. How these accounts get divided depends upon a number of factors including what type of accounts they are. Individuals must fill out paperwork to avoid tax penalties, and an individual IRA requires a transfer incident. For 401(k)s and employer-sponsored funds, a Qualified Domestic Relations Order is necessary.
Individuals should be sure to remove their ex-spouse as the beneficiary on retirement accounts. They also must decide how they want their funds distributed. Individuals can take cash out, or they can roll the funds into their own retirement account. They may also wait until the account owner retires and begin taking distributions at that time.
When estimating how much they will receive from the retirement account, individuals should also note what taxes apply. Roth IRAs are funded after income tax is paid, but traditional IRAs, 401(k)s and 401(b)s are funded pre-tax. A couple who can agree on how to divide their retirement accounts and other property may find that they spend less time and money on the issue than a couple who turns to litigation.
Retirement accounts are only one part of the property division that must occur during a divorce. Depending on how complex a couple's financial situation may be, there might be real estate, art and investments to consider. If either individual owned a business or the two owned a business together, the situation becomes even more complex. Before visiting an attorney, an individual might want to make a list of debts, assets and income. Other issues that may need to be considered include spousal support, child custody and visitation and child support. An attorney may be able to help an individual develop a strategy that addresses these issues.