While they have become less common over the last couple decades, pension plans once represented the bulk of retirement income for many workers in Texas and across the United States. Unfortunately, these types of employer-sponsored plans can make for complicated divorce proceedings, as they can be difficult to valuate accurately and even more difficult to split between both parties to a divorce.
Effective and knowledgeable legal counsel can make all the difference when it comes to dividing pension and retirement benefits in an Austin divorce. A qualified high-asset divorce attorney could walk you through how state law defines these kinds of assets, ensure a fair valuation of divisible benefits, and work tirelessly to protect your financial best interests from start to finish of your divorce.
When Are Retirement Benefits Divisible in a Divorce?
Much like retirement savings in 401k accounts, IRAs, and similar financial instruments, any pension plan benefits accrued between the moment a marriage began and the moment an ensuing divorce concludes may be considered as community property. Even if community property assets are solely in one spouse’s name, they still may be subject to equitable division by a court during divorce.
Importantly, many pension and retirement benefits cannot be divided through an Austin divorce unless certain prerequisite conditions are met. For instance, a party to a divorce is only eligible to receive Social Security Spousal Benefits based on their soon-to-be-former’s spouse qualification for Social Security Benefits if their marriage lasted for longer than 10 years.
Additionally, military retirement plans sometimes allow for spousal benefits, but the exact benefits available vary based on the amount of time the former servicemember in question spent in the service during their marriage. A dedicated attorney could offer further clarification on a case-by-case basis regarding whether certain benefits could be considered community property and what that might mean for the asset division process.
Enforcing the Prompt Division of Benefits
In the City of Austin, courts automatically impose standing orders once someone files a complaint for divorce, the purpose of which is to prevent either party to that divorce from moving, spending, or hiding potentially divisible assets. This order also applies to retirement funds, so any party to an Austin divorce who tries to withdraw retirement or pension benefits before they can be equitably divided could face contempt proceedings, which in turn could lead to serious civil and criminal penalties.
The process of actually receiving these kinds of benefits can be complex even with a court order, as pension accounts and similar financial instruments are managed by companies on behalf of individual employees rather than the employees themselves. Seasoned legal counsel could provide crucial assistance with pursuing a Qualified Domestic Relations Order and taking any other required legal action to compel a private employer to divest community property assets from a soon-to-be-former spouse’s retirement benefits.
Learn More About Dividing Pension and Retirement Benefits During Divorce from an Austin Attorney
Even in high-asset divorces, retirement savings and benefits often represent a significant amount of a married couple’s total divisible property. However, the fact that these benefits often play a significant role in the asset division process does not mean valuating and dividing them is simple or straightforward in practice.
In light of the many complexities and complications that can crop up when dividing pension and retirement benefits in an Austin divorce, retaining an experienced high-asset divorce attorney is virtually essential for anyone who wants their divorce to proceed as smoothly as possible. Get started today.