Dividing pension and retirement benefits in a Frisco high-asset divorce can be complicated and emotional. Retirement assets are a measure of years of hard work and planning. In Texas, retirement and pension benefits earned during the marriage are marital property, which means that they are subject to division during divorce proceedings.
Understanding the legal framework and how these divisions are handled can help reduce conflict and ensure fairness. It is possible to get what you deserve in a divorce without increasing strife, and at Towson Law Firm, PLLC, our skilled, high-asset divorce attorneys could help. Call today to schedule an initial consultation with our dedicated legal team.
Texas is a community property state—most assets acquired during the marriage are presumed to belong equally to both spouses. According to the Texas Family Code § 3.002, community property includes income and benefits earned during the marriage. The spouses are a partnership, and all earnings from the marriage are presumably the product of their working together and providing support for one another.
Retirement accounts and pension benefits often fall under this category, even if held in one spouse’s name in a high-asset divorce in Frisco. However, these accounts often contain earnings from before the marriage or after separation or divorce—those assets are not subject to division. Determining which portions of these accounts are community property versus separate property can be a critical step, which a seasoned divorce attorney could help with.
In Frisco high-asset marriages, people often have multiple types of retirement or pension benefits, including employer-sponsored retirement plans like pensions or 401(k)s, individual retirement accounts (IRAs), and military or government pensions. Each type of benefit may require unique handling to ensure proper division.
Dividing a 401(k) often involves drafting a Qualified Domestic Relations Order (QDRO)—a court order instructing a retirement plan administrator to distribute a portion of the account to the non-employee spouse. The QDRO process is technical and requires precision. Errors in drafting or filing the order can lead to delays or unintended financial consequences.
Military pensions and government retirement benefits require special consideration because they involve federal and state law. The Uniformed Services Former Spouses’ Protection Act (USFSPA), 10 U.S.C.S. § 1408, allows Texas courts to divide these benefits under certain conditions.
Government pensions, such as those from the Texas Teacher Retirement System (TRS), also require careful handling. These plans may have specific rules about how benefits are divided, and a QDRO may not apply. Instead, the division of these benefits might involve a separate domestic relations order. These pensions are not usually substantial, so rather than trying to divide them, high-asset couples may consider providing other assets in lieu of a division during a Frisco divorce.
Accurate asset valuation is essential to ensure a fair division. Retirement accounts like 401(k)s and IRAs may have easily identifiable balances, while pensions require calculating the present value of future benefits. In Frisco high-asset divorces, these assets may represent a substantial portion of the couple’s property.
The courts look at various factors when dividing retirement benefits, including the length of the marriage, each spouse’s contributions, and the overall financial situation. In many cases, one spouse may retain full ownership of a retirement account while the other receives an offsetting asset of comparable value. For example, one spouse might keep the retirement account while the other receives a greater share of the marital home equity.
For many couples, retirement accounts represent one of the most significant assets in a marriage. Dividing pension and retirement benefits in Frisco high-asset divorces may seem complicated because one spouse may have earned substantially more than the other, and these assets may be in their name. However, if earned during the marriage, they are still community property.
Ensuring these accounts are divided fairly is essential for both spouses to move forward financially after the divorce. Negotiating an agreement that meets both parties’ needs can often avoid prolonged litigation, saving time, money, and emotional strain. Consult our hardworking family law attorneys to learn more about your legal options.
Our Law Firm’s approach to your case is based on individual circumstances. Whether it is a simple negotiated settlement, or it requires an aggressive approach, we will protect and defend your best interests.
