Is My Pension Considered Marital Property?

 Posted on November 21, 2018 in QDROs, Pensions and 401(k)s

During Texas divorces, a couple’s marital property is subject to division. In most cases, this means that divorcing spouses must grapple with who will retain a variety of assets ranging from houses and vehicles to financial assets, such as bank accounts and pensions. Of these types of assets, financial property is often the most difficult to divide. This is especially true for pensions, the status of which depends on when the pension was acquired and whether a pre-existing agreement is in place. For help determining whether your own pension qualifies as marital property and whether you can expect a portion of those payments upon divorce, please contact a member of our high asset divorce legal team today.

Community Property States

Texas is one of only nine community property jurisdictions, which means that almost all assets acquired by a couple during their marriage are considered to belong equally to both parties if they later decide to divorce. The assumption in most cases is that these assets will be divided 50/50 between the parties. This rule applies to physical property, such as real estate and personal possessions, as well as financial assets like retirement accounts and pensions.

Marital vs. Separate Property

In general, retirement assets earned during a marriage are treated as marital property, including:

• Retirement savings accounts that are funded during the marriage;
• Earnings on retirement funds during the marriage; and
• Pension benefits earned during the marriage.

However, deposits made prior to marriage or after a couple filed for divorce are usually considered to be separate property and will not be divided between the parties upon divorce. This applies equally to income or benefits, including employer fund matching, which will only be divisible if earned or accrued during the marriage.

The only exception to this rule is when a couple has an existing prenuptial or postnuptial agreement, in which they already determined how the pension would be divided upon divorce. In these cases, the contents of a pension plan could be considered separate property and so remain in the possession of the original owner.

How Are Pensions Divided?

Once a court determines how much of a pension was actually accrued during the marriage, it will arrange for that amount to be divided equally between the parties. This could take the form of a payment equalling exactly half of each applicable pension fund payment, or a court could allow one spouse to retain the full pension amount and then award the other spouse assets of comparable value.

Texas Divorce Pension Division Assistance

Your retirement assets, including any pension plans, will be an important factor in determining your income when you retire. For this reason, it is important to retain an experienced and dedicated Round Rock high asset divorce lawyer who can ensure that any division of your pension is fair. Please call Powers and Kerr, PLLC at 512-610-6199 today to learn more about how we can help.

Sources:

https://guides.sll.texas.gov/community-property

https://kb.osu.edu/bitstream/handle/1811/64827/1/OSLJ_V57N1_0203.pdf