The process of dividing property during a divorce can be tricky. Many people automatically think of dividing homes, savings accounts and other assets but may fail to consider retirement accounts, IRAs and other such assets. Divorcees in Texas should educate themselves on the process of dividing all of their marital property.
There are several ways in which a couple can divide 401(k) assets. In the simplest cases, one spouse is granted the 401(k) funds in exchange for other assets that he or she wants in the divorce. Other options include dividing the 401(k) equally between both parties, converting the 401(k) into an IRA or liquidation of the 401(k) in order to pay one of the spouses.
IRA division is typically considered a more straightforward process. IRAs that were opened during the marriage are considered marital property while IRAs that belonged to one spouse before the marriage are typically considered personal property unless marital funds were used to fund them. The money used to fund the IRA is typically awarded to the spouse of provided it.
Annuity division is typically something that is negotiated, primarily because of the tax implications associated with it. Both parties will have to come to an agreement as to how the annuities are divided, even if that agreement comes in the form of a court order. In most cases, the annuities are withdrawn, and new contracts are formed where each party receives their allotted amount.
Any form of property division in a divorce has the potential to become contentious. It is easier for both parties if they can come to an agreement about how things will be split, but that is not always possible. An experienced attorney may guide you through the divorce process from start to finish.