Careful financial planning can make the difference between a smooth divorce and a difficult one. Your and your spouse’s assets will be divided under Texas law. This includes any retirement plans earned by either of you. Talking to a financial planner and an attorney may help you divide retirement accounts more easily.
Texas is a community property state along with eight other such states. In these states, you and your spouse share jointly all property gained during the marriage. You also divide all things jointly in a divorce. This includes not just physical property, like houses and cars, but also things like retirement accounts and debts. Individual retirement needs may be greater than joint needs, and a retirement planned for two together may not be enough to support two separately. Many people wish to come to an agreed-upon division of assets instead of having their property divided exactly in half by the courts.
Some couples divide their retirement plans easily while others have more complicated situations. Remember, you are not just dividing future payments but also future contributions to the plans. A retirement plan may face a penalty for early withdrawal, but you can plan to avoid losing that money. If you do not want to split your retirement plan, the law provides some creative ways around those problems. Potential solutions include:
- Planning for the division of retirement assets
- Trading desirable assets along with undesirable ones, like taking on debt but getting the house in exchange
- Selling off everything and then dividing that money equally
Retirement plans are your future stability. Dividing these accounts can be tricky, but a financial planner can help. With a bit of planning, an ugly divorce can stay civil. A divorce attorney may also help find ways that each partner can get the major things they want.