Portrait of John K Grubb

Texas Divorce and Prenuptial Agreement

5005 Riverway Drive, Suite 450 • Houston, Texas 77056

Phone: 713-877-8800 • Fax: 713-877-1229

One of the More Complex Divorce Areas – Retirement Accounts

Retirement accounts like 401(k)s and Individual Retirement Accounts (both “IRAs” and “Roth IRAs”) are typically one of the more complex assets that a court has to handle when a couple divorces. State laws, federal laws and prenuptial agreements combine for a mix of confusing rules that govern retirement accounts. The following are a few of the guidelines that spouses should take into consideration when getting married or divorced.

Your spouse is the default beneficiary of your 401(k) account, and a prenuptial agreement may not even able to change this. Federal law requires that you have to get your spouse to waive this right to your 401(k) assets. For those with multiple marriages and children from a previous marriage, the death of a spouse or a divorce could mean disaster when deciding who gets the 401(k) assets.

IRAs are a bit different in that state law governs them. You can usually name whomever you want to receive your IRA assets, but the situation is trickier in community property states like Texas. In these states, the law presumes that anything acquired during a marriage is joint property belonging to both spouses. IRA accounts could fall into this category, so that even if one spouse does not participate in the other’s IRA growth, the former has a right to half of it.

Retirement accounts are a complex area of divorce and family law. In community property states like Texas, if spouses take no action, a court could split these accounts right down the middle in the event of a divorce, regardless of whether both spouses actually contributed to the retirement accounts. With many retirement accounts reaching hundreds of thousands of dollars or more, couples set to marry or those already married should consider how they wish manage their finances in the event that the marriage does not work out.

John K. Grubb & Associates, P.C. – Houston divorce attorneys

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