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Will you need a QDRO as part of a complex Texas divorce?

On Behalf of | Mar 16, 2022 | Divorce

Some divorces are straightforward and require very little negotiation to finalize. The spouses don’t have much property, didn’t stay married long and don’t have children together. They might have a marital agreement that explains exactly how to split up parental responsibilities and shared property.

Other couples will have a much more difficult time separating their lives when they divorce. The longer you remained married and the more property you acquired during the marriage, the more complex your divorce proceedings will become. Longer marriages can also mean one spouse has far more personal financial stability than the other.

Older couples may have decades of shared income and property to divide when they separate. Some of these couples will need to draft a qualified domestic relations order (QDRO) as part of their Texas divorce.

What does a QDRO do?

The name of the documents does not really describe its purpose. It is a lawyer-drafted document that allows couples to divide pensions or retirement accounts without financial penalty when they divorce. Many couples will need a QDRO to facilitate the division of retirement savings because they risk diminishing the balance by making a withdrawal.

Early withdrawals from retirement savings will usually trigger penalties and taxes, but that is not a concern if a couple divides an account in accordance with a QDRO. The QDRO reflects the terms entered in the property division order and requires both approval by the court and submission to the professional managing the retirement account in question.

Given that at least the balance of your retirement savings account that you acquired during the marriage is community property that you need to split, the chances are good that you may need a QDRO to divide your assets in a Texas divorce.

You don’t always have to split the account

It may be possible to negotiate a property division agreement with your ex that does not require that you divide a specific retirement account. If there are other assets they want to keep, you may be able to negotiate a settlement that does not require that you divide the retirement account itself.

Learning about state law and keeping your focus on your top priorities can help as you prepare for a complex divorce in Texas involving multiple kinds of assets.


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