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Different Ways to Divide Your Retirement Plan in Your Divorce


If you and your partner has come to an unlikely divorce, division of properties, assets, and other possessions might be something you have to talk about sooner rather than later.

Likewise, your communal retirement plans fall under the category of properties that have to be divided between both parties in case of separation or divorce.

In light of Texas Law, retirement plans act as an indirect compensation to the spouse, which he or she earned during the course of their marriage. However, it is a case-to-case basis, because there are instances where the retirement plan does not act as shared property.

One example would be when a couple lives in a “common law state” for 10 years, then the benefits of the retirement plan would be classified as an individual and separate property of the employee spouse and would not have to be subjected to a “just and right” division under the Texas courts.

Of course, there are a number of ways in which you and your partner could divide the retirement plans among yourselves, but here are the most common ways which you could try and consider for your situation.

Half-and-half

The most simple and common method to split something up – into equal halves.

Here, both you and your spouse could walk away after a divorce with equal amounts of the retirement plan. Nobody gets more than the other.

However, this would only work if both parties have similar retirement plans, or if one party allows the other to receive a greater share of theirs to reach an equalized division.

Go with the flow

Another method is to just agree to settle on whatever amount the employee spouse could spare you, especially if it just so happens that the retirement plans could not cater both equally.

However, going with this method might have its downfalls, such as being more beneficial only in the short-term, or being burdensome in the long run.

So you have to carefully analyze the situation and the benefits that come with it before agreeing to anything.

Whichever method you choose to go with in dividing your retirement plans between you and your spouse, always keep in mind all the pros and cons before ultimately deciding.

It has to be beneficial and practical, especially if you are someone who is still far from the suggested retirement age.

No matter what you choose, I hope you do not regret in the future. Good luck!

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Mr. Hutton is a Divorce and Custody Lawyer based out of Round Rock, TX. His background is with child psychology at Arizona State University where he received a B.S. in 2006, and he continued this by working with the Children’s Right’s Clinic at the University of Texas School of Law where he received his J.D. in 2009. Throughout his practice, he has been a strong proponent of utilizing modern technology to improve his practice and the representation of his clients. He currently is the technology chair of CAFA of Travis County and is committed to improving and modernizing the practice of law in Texas. If you have any questions you can contact him at timothy.hutton@austintexaslegal.com

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