Going through the entire divorce process can take a substantial emotional toll on everyone involved, however amicable the split may be. But the process can be made even more distressing when your hard-earned assets are at stake, especially when you learn that the nest egg you’ve built over the years is at risk of being distributed along with your other assets.

Many people going through divorce proceedings are surprised to learn that their ex-spouse may be entitled to a significant portion of their retirement fund and pension during asset distribution. Knowing your options during this process could spell the difference between protecting your assets and losing a substantial portion of them to your ex-spouse, which is why you need the help of an experienced divorce attorney to ensure the protection of your hard-earned properties.

How Assets are Divided During a Divorce

The distribution of a couple’s assets during a divorce is handled differently in each case. This will depend on the state laws that govern the details of each property in each case.

But generally speaking, state courts use two distribution methods by which to divide assets between both parties, which are community property division and equitable distribution.

Community Property Distribution. States that distribute assets under community property distribution consider assets accumulated over the course of the marriage to be the property of both spouses. This shared ownership means that all assets are distributed equally (50/50) between both parties during divorce proceedings, including accumulated funds such as a 401(k) account and retirement fund.

Equitable Distribution. States that follow the equitable distribution method of dividing property determine the amount to be shared based on the court’s judgment through the judge handling the case. Although the distribution of assets won’t always be equal under equitable distribution, it will be determined according to what the judge deems to be equitable or fair for both parties.

In Texas, courts follow the equitable distribution method when dividing a couple’s assets. In this system, each party will have to provide their own arguments to the judge about what they think is fair, which the court then provides judgment based on those arguments.

How Much of Your Pension and Retirement is Your Spouse Entitled To Under Texas State Law?

Retirement accounts like a 401(k) and a pension are commonly a couple’s largest assets, the division of which often being a point of great contention between divorcing spouses. But before a judge can give a ruling on how to divide your retirement accounts, they will first have to determine how much of your account counts as a marital estate before determining the percentage of the account that can be distributed.

While retirement accounts may be funded throughout the marriage, it’s not uncommon for the process of funding the account to begin well before the marriage even started. It could be a few months up to a few years. This means that even though pension benefits and retirement accounts are often divided equally between spouses, your ex-spouse will only have a stake in the amount earned during the marriage. 

For example, if your retirement account was funded for 10 years prior to your marriage of 20 years, your ex-spouse will only be able to seek half of the other 10 years earned during the marriage.

In most instances, judges allow the couples to handle the property distribution aspect of the divorce when they prefer to handle it on their own. This means that you can work directly with your spouse to determine how your retirement accounts or pension benefits will be divided. If you prefer to keep your retirement benefits, you may discuss the matter with your spouse during this process.

What Other Alternatives Are Available?

Alternative agreements can be reached during discussions with the other party if you don’t want to hand over half of your retirement benefits to your ex-spouse. Discussions can be made while leveraging other assets of equal value or cashing out your spouse’s share of the account in exchange for you retaining ownership of your entire account.

Your divorce attorney can also help you look for an out that can help you keep the entire account without having to sacrifice other assets. For instance, if your ex-spouse has a pension or other retirement assets that they want to protect, you can both agree to leave each other’s retirement accounts out of the divorce proceedings. This will quickly resolve the matter and allow both parties to walk away with their benefits intact in a less time-consuming way.

How Your Divorce Attorney Can Protect Your Pension and Retirement Fund

Having a trusted divorce attorney can help you retain control during the entire divorce proceedings. Throughout the whole process, a divorce attorney can: 

1. 
   Mediate on your behalf over the course of the proceedings.
2. Keep you informed of your options throughout the entire process.
3. Ensure you get the best settlement possible to protect your assets and investments.