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Dividing retirement accounts in divorce

Division of assets is one of the most critical steps in many Texas divorces. The marital home, vehicles and business interests might be points of contention as they can be worth a lot of money. Retirement accounts, too, can be among the most valuable assets that a couple has developed, and dividing them between the parties can be contentious.

According to a 2016 survey of members of the American Academy of Matrimonial Lawyers, the most common points of contention in divorce are alimony, at 83 percent, pensions and retirement accounts, at 62 percent, and business interests, at 60 percent. Dividing retirement accounts and pensions can be more complicated than dividing other assets, as there can be tax consequences or special requirements placed on the process.

The only way for a person to access his or her share of the spouse's retirement account is by the terms of a qualified domestic relations order. The QDRO is a separate document from the divorce decree. It is typically drafted by an attorney, either one that's working for one of the parties or an independent attorney brought in for the purpose of creating the QDRO.

Before the QDRO is submitted to the court for approval, it should be reviewed by the divorcing parties and their attorneys. If there are multiple pensions or retirement accounts at issue, a separate QDRO will be required for each one.

People who have questions about the process of dividing retirement accounts or other assets in divorce might benefit from the assistance of a divorce lawyer. A lawyer who has experience in divorce cases might be able to help by gathering information on the relevant retirement accounts and creating a QDRO to divide them. Especially in a high asset divorce, a lawyer might advise the client to roll retirement assets into an IRA to avoid paying taxes on the funds when they're received.

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