Individuals confronting divorce often wonder whether they will be able to keep their retirement account(s) after divorce or whether they will be required to share their account(s) with their soon-to-be ex-spouse. Retirement benefits may include pensions, deferred compensation accounts, 401(k) accounts, Individual Retirement Accounts (IRAs), or other retirement savings plans. In Texas, whether retirement benefits legally belong to both spouses depends on whether contributions to the retirement account were made prior to or after the date of marriage. Contributions which were made prior to marriage will be considered the separate property of the spouse who made them. By contrast, contributions made during the marriage will be considered the community property of both spouses, regardless of whose name the account is held in or who contributed to the account. A retirement account may be entirely separate property, entirely community property, or comprised of both community and separate property.
It is important to note that for some retirement savings plans (such as 401(k)s), the length of marriage is irrelevant to whether the savings can be divided upon divorce. However, for other types of retirement benefits (such as Social Security spousal benefits), there are specific eligibility rules which dictate how long a couple must have been married for a spouse to be entitled to the other spouse’s retirement benefits. For instance, to be eligible for your spouse’s social security, you must have been married for a minimum of ten years (and must meet other requirements as well).
If you live in Texas and are concerned that your spouse may attempt to cash out their retirement prior to your divorce being finalized, there are two safeguards in place to protect your rights:
If you are concerned about how your rights with regards to your own or your spouse’s retirement account(s) will be impacted by divorce, contact Kirker | Davis LLP to schedule a meeting with a lawyer today.