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Can you legally protect your retirement account in a divorce?

For many couples, choosing how to split up assets in a divorce is one of the hardest parts of the process. Each spouse probably has their own opinion about what is reasonable and fair given the circumstances of the marriage. In many cases, neither opinion really lines up with what the law states is appropriate.

Adjusting your expectations to reflect what is reasonable and likely is an important step for those going through divorce. Failing to work with the realities of how the courts divide assets could lead either to wasted time and money litigating unnecessarily or the accidental violation of the law if you try to hide assets.

If you have a substantial retirement account, you may not relish the idea of sharing it with your ex after the divorce. It is common for people who have a retirement account to wonder whether Texas law can compel them to share it in a divorce. While there is no clear answer for how the courts will split your assets, it is likely you will share you retirement savings with your ex.

In most circumstances, retirement assets are subject to division

Texas takes a community property approach to asset division in divorce. In general, that means that they treat the assets and debts acquired during the marriage as equally owned by each spouse. There are exceptions for certain assets such as inheritances and gifts. When applying the community property approach to retirement accounts, it usually means that the amounts accrued during the marriage are subject to division by the courts.

Amounts deposited prior to the marriage and after filing for divorce will remain the separate property of the person who helped the account. Even a pension can wind up divided in a Texas divorce. The courts can either order your employer to split the account or order you to pay support for the duration of the pension.

In certain rare situations, you may not have to share your retirement account. If you have a prenuptial or postnuptial agreement on record allocating your retirement accounts just to you, that might protect you from losing any portion of it in the divorce.

Hiding or lying about accounts could get you into legal trouble

The court only knows about the assets that you report to them. However, this doesn't mean that it is a good decision to try to hide some of your money or assets from the court. If either the court or your spouse realize what you are doing, you could wind up facing substantial penalties.

Discussing your situation with an experienced Texas family law attorney can help you determine the best strategy for maximizing the size of the property settlement you receive.

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