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How to Split Retirement Accounts in a Texas Divorce

When you have just started the process of getting divorced, it might feel burdensome and endless – like you’re in a dark tunnel and you can’t even see the light at the end yet. A divorce certainly does not happen overnight, but it really doesn’t go on forever either. It’s just a matter of time before the nightmare would finally be over. Before the divorce would be finalized, you will have to go through the pain of sorting out finances, debts and even retirement accounts.

Splitting retirement accounts either of you own is an important and undoubtedly complicated part of the divorce.

Texas Laws on Community Property

Texas laws pays utmost attention to the distinction between community property and separate property. Community property refers to any property that was acquired during your marriage. Retirement accounts that were secured during the marriage is considered community property. On the other hand, separate property refers to properties acquired before the marriage. In a Texas divorce, community properties are subject to division along with other community assets. Though it can be split exactly in half, it doesn’t necessarily have to be. You can create an agreement with your spouse with regards to the percentage division. The judge can also decide the division that he or she considers fair.

All You Need to Know About ERISA

ERISA stands for Employee Retirement Income Security Act. This act governs the retirement plans and accounts that are created by private employers. This act also ensures that retirement plans can be divided as the court sees fit when a divorce is finalized. Ensuring the division of a retirement account is not as simple as sending a copy of the Final Decree of Divorce to the manager of the retirement account. You will need a QDRO (Qualified Domestic Relations Order) to be sent to the administrator of the retirement plan. This must be signed by the judge to be considered valid. It will then be reviewed by the administrator to make sure that it is in line with the policies of the retirement plan. Once it is approved by the administrator, it will then be tagged as qualified for the division of the retirement account. Even if the final decree of your Texas divorce states that there should be a property division, if the administrator of the retirement plan thinks that it is not compliant to the rules of the plan, it cannot be used.

Drafting the QDRO

Obviously, the process of ensuring that the retirement will be divided properly is somewhat sensitive and you will have to be careful in dealing with it.

When should you draft a QDRO and when should you submit it to the judge? Hiring a Texas divorce attorney will certainly make things easier for you. Some attorneys opt to wait until the judge has issues the Final Divorce Decree before drafting the QDRO. They want to wait until the judge has announced the terms of the settlement for the retirement account.

Considering QDRO Early

If you have not started processing your divorce yet, it is ideal that you give some thought to splitting retirement accounts as early as now. You can try to come into an agreement before the judge has given the Final Divorce Decree, to lessen the possibility of delays.

 If you are already in the middle of the divorce process, it is still better not to waste any time. You’d want to finish the process cleanly and completely within a short period of time. Only then can you get on with your new life. What we want to happen is get the QDRD signed by the judge as quickly as possible. Then we want to have it approved by the administrator of the retirement plan quickly. To make this happen, your attorney should draft the QDRD at the same time the Final Divorce Decree is drafted. This will give you some time to debate about the terms or language of the QDRD with your spouse. One benefit of doing it this way is that the judge can also help out with a decision about your QDRD issues since the divorce has not been finalized yet.

 You should have a skilled Texas divorce attorney guide you through the process. Then you will be able to split retirement accounts successfully without any issues.


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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