How Are 401(k)s Divided in Divorce?

Divorce is overwhelming for anyone to handle. Agreeing on matters like child custody and property division is often a challenge. Even if this is an amicable divorce, you and your spouse could face contention while determining how to split your retirement accounts.

Dividing a 401(k) is one of the most complex issues involved in asset division. You spent a large portion of your life building the account so you can retire comfortably one day. However, now that your marriage is ending, you could lose some of it to your spouse.

Most people think they should walk away with the assets they entered the marriage with and equally divide the property they own with their spouse. Unfortunately, equitable division of assets doesn’t always mean a court will order you to split your property down the middle. When it comes to a 401(k), a range of factors can determine whether you deserve all or part of the funds.

Your 401(k) Might Be Community Property

Typically, state law considers a 401(k) community property. Community property is property acquired during marriage by one or both spouses. Texas is a community property state, so both parties have rights to these assets when going through a divorce.

However, it might be possible to keep the total funds in your 401(k) account if you can prove that it should be considered separate property.

Separate property is property a person acquires before marriage or as an inheritance or gift while married. If you have evidence to show that your 401(k) is separate property, you could avoid splitting it with your partner once the divorce becomes final.

According to Texas Family Code 7.002, the court must divide a divorcing couple’s assets in a just and right manner. That means the judge can use their discretion and consider any contributing factors to decide the best way to split all real and personal property between the spouses.

Just and right doesn’t necessarily mean a 50/50 split or keeping every penny in your hard-earned 401(k) plan. The judge could decide it’s just and right to distribute most of the funds to your spouse because you earn a significantly higher income. It will depend on the circumstances associated with your marriage.

Factors Contributing to 401(k) Division

Multiple factors can influence a judge’s decision regarding the division of a 401(k) account. The most common factors include:

  • Whether the 401(k) is considered community property or there’s evidence of it being separate property
  • Length of the marriage
  • Age of each party
  • Total income earned by both spouses
  • Employment, education, and earning potential
  • The total amount of debt each person owns
  • Which person is the custodial parent if the couple shares children
  • Tax penalties due to 401(k) division
  • Whether the divorce is fault-based, meaning specific circumstances caused the marriage to end, such as adultery
  • Each spouse’s ability to support themselves after finalizing the divorce
  • The physical and mental health of each party
  • Whether either spouse is entitled to a reimbursement claim.

Why You Should Consider Mediation

Divorce proceedings can be time-consuming and costly. Between paying your attorney, filing fees, and court costs, the expenses you rack up can be significant and cause financial strain. It might be best to resolve the division of the 401(k) plan through mediation.

Mediation involves a mediator acting as a go-between for opposing parties to resolve a dispute. You and your spouse will meet with the mediator and your attorneys to try to agree on how to split the funds in the retirement account.

You or your spouse can begin the meeting by proposing an idea to settle the disagreement. Negotiations occur until you work out a plan you’re both happy with and that meets each person’s needs.

If you reach an agreement regarding the division of your 401(k), you won’t have to take the case to court. Mediating this part of your divorce allows you to have some control over the result. However, you could find yourself walking away with nothing if a judge must make the decision for you and your spouse.

Contact an Experienced Woodlands Property Division Lawyer

BB Law Group PLLC understands the uphill battle you face. Dividing a 401(k) plan might seem like a daunting task, but our legal team knows how to make this process go smoothly.

You can depend on us to review the circumstances of your divorce and create a strategy to try to reach your goals. We will fight to protect your rights, so you walk away from your marriage with your fair share of the retirement account.

If you’re considering filing for a divorce and need assistance with a 401(k) division, do not hesitate to contact BB Law Group PLLC. We will provide you with the representation and guidance necessary to get through this challenging time in your life.

Call us at (832) 534-2589 for your confidential consultation.

How is Property Division Determined in Texas?

If you’re contemplating divorce, you’re no doubt thinking about what happens with all the things you own, the property you’ve acquired while you were married. The state of Texas is a community property state, which influences how property ownership is determined in a divorce. In Texas, the property that the couple owns generally belongs equally to both partners.

property divisionCommunity property includes both spouses’ wages and any items purchased using income earned by either spouse during the marriage. Debts acquired by either spouse during the marriage are also community property. Even if one spouse acquires property individually during the marriage, this is usually still considered community property in Texas.

There may be exceptions to what is considered community property if one spouse can prove they own property on their own. If they can do so, that property is then called “separate property.” This may be the case if one spouse individually owned property prior to the marriage. Separate property may also originate from an inheritance received just by one spouse or a gift of property received by just one spouse. Any income from separate property may itself also be considered separate property.

Monetary compensation from a personal injury settlement or lawsuit received by only one spouse would also be considered separate property. The exception is if the money includes a portion as compensation for lost wages. That money would be considered community property. If a property is proven to be separate, then it will remain the property of that spouse, and the court will not be able to consider it community property.

If separate property was combined with the other spouse’s property rather than kept separate, it would be considered community property. Property may be considered community property regardless of whether or not both spouses are listed on an ownership document such as a deed or title. Even if only one spouse is listed on the ownership document, it may still be considered as owned by both parties. Ownership may also be influenced by a prenuptial or postnuptial agreement, which may specify whether particular property is considered community or separate.

Retirement accounts such as IRAs and 401(k) accounts are considered to be community property. The exception is that contributions made only by one spouse before the marriage may be considered separate property. The court will determine which portion of the accounts are considered community and which are separate.

Community property will be divided either by the court or by the couple if they reach an agreement. In that case, the court will typically let the agreement stand. If the couple is unable to reach an agreement, then the court will split the property. Generally, it will be split equally, meaning that each individual receives half.

division of propertyThere may be situations in which the court does not split the community property equally and instead divides the property at their discretion based on specific circumstances. In cases like these, the court will consider relevant factors to decide what it considers to be a fair division. These may include considering whether one spouse is the primary caregiver for any children from the marriage, each spouse’s earning capacity, and how much separate property each partner owns.

Once the property division is determined, the court may, in some cases, award one spouse periodic payments from the other spouse. This is called alimony or spousal maintenance, and specific conditions must be met for a court to award alimony. These generally include:

  • One spouse’s inability to earn enough wages to support themselves (in a marriage that had a duration of at least ten years)
  • One spouse suffering from a disability that prevents them from supporting themselves
  • One spouse being the primary caregiver for a child who has a disability
  • One spouse being convicted of domestic violence toward children or toward the other spouse

Other factors apply, and a key consideration by the court will be whether the spouse who is requesting alimony has made documented unsuccessful attempts to support themselves.

If you are in the process of getting a divorce, you need an attorney who will advocate for you and make sure that you get all the property you are legally entitled to receive. Call (832) 534-2589 today to speak with a Texas divorce lawyer from BB Law Group PLLC who will help you understand the process and your options as you navigate this challenging time. We will fight for you so that you can move on from the divorce and begin the next chapter of your life with the property that is legally yours.

Abandonment as a fault ground in Texas divorce

There are several reasons that a divorce in Texas law can be considered under a fault ground, though such a process can be unappealing if there is a waiting period. One of them is abandonment.

To begin, a court will not consider abandonment as such a reason if your spouse has not been gone for a year with the intent to leave, which you must prove. Many people, especially in the cases that the spouse’s money supplemented their own income, this can feel like an extraordinarily long time. Many of these people have children that they cannot support without their spouse and, in such cases, a suit can be filed for an affected Parent-Child relationship, granting custody and support.

In the case that marital misconduct occurred, which judges will not always grant, the normal equal division of property may be adjusted. In a case that involves abandonment, the abandoning spouse is not allowed to ask for support, while the filing spouse does have that option if they had been married for 10 years. Often, this support will last for less than three years and will not exceed a fifth of the spouse’s income.

Divorces tend to be messy and confusing and it’s always a good idea to hire an attorney to represent your needs and wants in the face of your dissolving marriage. Contact one of our attorneys at BB Law Group PLLC by calling (832) 534-2589 today.

The Steps of Filing Divorce in Texas

If a couple is considering filing for a divorce in Texas, the residency requirement of at least six months in-state and 90 days in-county must be satisfied by at least one spouse. Texas is one of the states that can be described as “mixed” in terms of divorce—both fault-based and no-fault divorces are allowed. Generally, fault-based divorces tend to be the less common of the two and are used in cases of domestic violence, infidelity, conviction of a felony, among others.

In Preparation: Though Texas boasts a universal form available to all counties, some places will generally prefer their own forms. You can contact the courts in those counties to find out which. In all cases, however, the forms used are an Original Petition for Divorce (includes Summons), Citation (or waiver), Notice of Service of Process, and Decree of Divorce.

For Filing: After the forms are completely filled out, you can file them at your specific county. In conjunction with this, a temporary restraining order can be requested from the court, preventing either spouse from undercutting the other in regards to finances and assets.

In Serving: Serving the documents to your spouse, also known as Service of Process, is required by the state of Texas. You can do this by a number of means, including via waiver, a sheriff or constable service, process server, or service by publication.

Divorce can be a messy and extensive process, which is why many people choose to have some sort of representation when going through the dissolution of a marriage. Contact one of our divorce attorneys at BB Law Group PLLC by calling (832) 534-2589 and we’d be happy to discuss your options in regards to your divorce.

Celebrity chef Anthony Bourdain divorcing his wife

Although news of a celebrity split is not new or surprising, it’s always sad to see a once-happy couple untie the knot. Traveling celebrity chef Anthony Bourdain is separating amicably after nine years of marriage to his most recent partner, MMA fighter Ottavia Busia.

The couple had been separated for some time now due to their non-traditional marriage, brought about by Bourdain’s strict schedule. Busia claims that they are both very happy with the decision and there are no bad feelings between the two. The 60-year-old chef, on the other hand, has yet to make a statement. He has said in the past that the demands of his job, which involve traveling 250 days out of the year, have led to a “dysfunctional” family life.

When he is home, most of his attention goes to their nine-year-old daughter, Ariane, and Busia has claimed to understand and respect these decisions.

If you or someone you know is considering divorce or needs assistance with any other issue relating to family law, the divorce lawyers at the BB Law Group PLLC are ready to help you better understand your legal options. Do not hesitate to contact us today at (832) 534-2589.

How to have a less toxic divorce

Divorce is always going to be hard, especially for those who don’t have a clue what they should do to protect their rights. However, there are some essential steps to make the process less devastating.

  • First, hire a good legal counsel, i.e. an expert on family law and divorce.
  • Be smart about financial matters. Make copies of necessary financial documents and create a separate bank account with savings in it if all finances are shared.
  • Find support during and after the divorce, such as friends, fellow church members, or divorce support groups.
  • “Conscious uncoupling,” which can also be described as “sensible” or “constructive” divorce can help couples to split up in ways that heal pain and diminish bitterness.
  • Finally, rebuild your life by letting go of negative emotions.

If you or someone you know is considering divorce or needs assistance with any other issue relating to family law, the legal team at the BB Law Group PLLC is ready to help you. Do not hesitate to contact us today at (832) 534-2589 to discuss your situation.

Billionaire Cohen’s former spouse may appeal divorce settlement lawsuit

The former spouse of American hedge fund billionaire Steven Cohen, according to a legal counsel, may appeal her case after a Manhattan federal court judge noted that her evidence in accusing Steven of fraud was insufficient, a May 19 report from CNBC said.

Patricia, in a 2009 lawsuit, is pursuing to receive 50 percent of $5.5 million worth of assets from Steven, 59, after their divorce in 1990. However, Chief Judge Loretta Preska stated her legal team failed to support her allegations of fraud due to a lack of evidence. The judge also stated Patricia filed the lawsuit too late as she had suspected Steven of concealing assets from her in 1991 and in 2006. Patricia’s legal counsel told reports that his client may choose to appeal the case, arguing that a jury might side with Patricia after reviewing the evidence.

The process of a divorce can be a difficult one, but it can become even more complicated if you suspect your spouse of fraud. If you are considering fighting against your divorce settlement, working with a skilled legal team can be a strong asset when seeking to strengthen your claim. Please contact our legal team of the BB Law Group PLLC in The Woodlands today by calling (832) 534-2589 to speak to an experienced lawyer about your case.

Adriana Lima now divorced from Marko Jaric

According to the news reports by the Business Standard and the Huffington Post, Victoria’s Secret model Adriana Lima, 35, is now officially divorced from her former husband, Serbian NBA player Marko Jaric. The two announced their official separation back in May 2014 and have now been granted a divorce. They tied the knot on Valentine’s Day in 2009 and have two daughters together, who are now ages 6 and 3. Lima and Jaric were married for five years before they decided to separate.

The terms of the settlement, which was filed at the Supreme Court in Manhattan, remained confidential. However, there are speculations that Lima has been granted primary custody of the now ex-couple’s children – Valentina and Sienna. Her legal representation refused to make a statement after being asked to comment on the matter.

Divorce is a difficult time for families, especially when children are in the picture. In The Woodlands, our compassionate legal team at BB Law Group PLLC, understands how draining the divorce process can be on individuals. If you are going through a separation and are considering divorce, please consider reaching out to our lawyers at (832) 534-2589.

Katharine McPhee officially divorced from Nick Cokas

A report by the New York Daily News revealed that actress-singer Katharine McPhee has officially been divorced from Nick Cokas as of February 8. The two were married in 2008. The 31-year-old Americal Idol runner-up filed for divorce in 2014, and her filed documents stated that the two had actually separated in 2013.

Their assets have already been divided. Cokas will keep their 2013 Jeep Wrangler, while McPhee is keeping the 2012 Mercedes-Benz SUV. Aside from a payment of just under $103,000 McPhee will owe her ex in the coming days, Cokas has also been granted spousal support. He is set to receive $400,000 from McPhee annually. Half of McPhee’s earnings from her deal with Columbia/Epic Records and songs she wrote during their marriage will be awarded to Cokas. McPhee will get to keep all her earnings from shows and tours that took place after her separation.

If you are in the middle of a marital crisis and are considering a divorce in The Woodlands, please consult with our lawyers at BB Law Group PLLC. Call our office now at (832) 534-2589 to begin exploring your legal options.

Jeremy Renner finalizes divorce

Famous Hollywood actor Jeremy Renner finalized his divorce on December 28. The actor was married for 10 months to 23-year-old model Sonni Pacheco before she filed for divorce back in December 2014, citing irreconcilable differences. The 44-year-old actor and Pacheco have a 2-year-old daughter named Ava.

According to the reports by People, Renner has been ordered to make monthly payments of $13,000 for child support. Additionally, five percent of the excess in his annual income will be provided for his daughter. Pacheco will not be receiving spousal support due to the prenuptial agreement that was signed in 2013. Renner will retain almost all of his properties, including his motorcycle collection.

According to some sources, Renner accused Pacheco of failing to adequately care for their daughter, claiming she would often choose to attend parties and consume alcohol instead of taking care of Ava.

The two were embroiled in a controversial custody battle before the announcement of the finalized divorce.

If you are considering a divorce in The Woodlands, you may want to consult with our compassionate divorce attorneys at BB Law Group PLLC to discuss your legal options as you move forward. Call our office at (832) 534-2589 today.

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