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QDROs, Pensions, and 401(k)s in Texas Divorces

Austin Texas QDRO Lawyer

Austin and Travis County Retirement Account Divorce Lawyers

For many couples, the most valuable asset subject to division in a divorce is their retirement fund. Under Texas law, if a pension or 401(k) is earned during the marriage, it is considered community property and both parties are equally entitled to it. Actually dividing a retirement plan, however, is not that simple. At Powers and Kerr, PLLC, we are experienced in helping clients prepare the necessary paperwork to implement court-ordered divisions of retirement funds. We make sure our clients are able to receive all of the benefits they are entitled to in their divorce.

Qualified Domestic Relations Orders and Pensions

Pensions, or defined benefit plans, are retirement funds with a set payout lasting from retirement till death. The amount of the payout is typically determined by the employee's salary and length of employment. Pension plans can be structured in a variety of ways. Understanding all of the possible options the plan allows is essential to maximizing the settlement. Attorney Bill Powers is familiar with the many parts of defined benefit plans and how to draft effective Qualified Domestic Relations Orders (QDROs), which are used to instruct your pension plan manager on how to implement the terms of your divorce settlement.

Dividing 401(k) Accounts Effectively

Defined contribution plans are another type of retirement fund in which contributions grow through tax-free interest until they are needed in retirement. These funds cannot be liquefied without a tax penalty until the beneficiary reaches retirement age. In a divorce, however, funds can be transferred without penalties between spouses. Like with pensions, QDROs are used to put into effect the terms of how the plan will be divided. It is the only way the company that manages the 401(k) can give a portion of the plan to another person.

At our firm, we have years of experience handling divorces that include retirement fund assets. We understand how these plans work, how they are valued and how to negotiate or litigate a fair resolution. We are skilled in preparing the QDROs necessary to make sure that resolution comes to fruition properly.

To learn more about the property division process and how it relates to retirement funds, call 512-610-6199 or contact us online to schedule a consultation. Located in Austin, our firm serves clients throughout Central Texas.

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