2 property division questions about retirement accounts

On Behalf of | Jun 18, 2022 | Firm News

You probably have questions about property division if you know divorce is coming. Texas is one of the few states that use a community property system. All marital property is eligible for division, even if you purchased the asset.

However, you might wonder what this means for retirement and pension funds. According to Texas Family Code, the court considers retirement and employment benefits as marital property under certain circumstances.

When is a retirement account marital property?

If the spouse made contributions to the account before marriage, the courts might consider it separate property. The retirement or pension fund account becomes marital property if a spouse contributes to it after the marriage date. It does not matter who contributes to the fund or how long the marriage lasts. Also, if the court deems the funds as marital property, it does not matter if it is a joint account or not.

How does the court divide retirement accounts?

The court does not have to split the accounts equally between the spouses. However, there are particular circumstances for certain pensions. Social security, military pensions and other special accounts have different rules for property division. If you benefited from Social Security because of your marriage, the marriage must last for ten years before the courts divide it between the spouses. In addition, the spouse must be 62 years of age, unmarried and not currently receiving a more significant benefit from their work.

Property division in Texas might seem unfair to divorcing couples. However, there are options for couples who want to go through an equitable separation. This is not always possible, but trying to resolve the end of a marriage amicably is almost always the best solution.