Divorce is not something couples look forward to, but when it is the best option for the future spouses will initiate and work through the process. Even when couples have the right frame of mind, dissolution can be complex and could stir up many emotions. It is difficult to transition from married life to a single one, thus causing some disputes surrounding who gets what. Property division is one of the most contentious divorce issues, whether it is a high asset divorce or not.
How can you get through property division effectively? According to the Texas Family Code, marital property is to be split in a just and right manner. But, most spouses do not understand what that means exactly. When it comes to the house, the car, retirement accounts, and other marital property, some spouses are ready and willing to fight to the end to get what they believe is rightfully theirs.
When it comes to a 401(k) account, like other presumed marital property, the court will attempt to determine whether it is deemed community property or falls under the category of separate property. While this sounds like a simple step, a 401(k) increases in value over time, making it very appealing to claim as marital property. However, in most cases, the original value, as well as the increase in market value, is considered to be separate property. Any contributions made to the account during a marriage are considered to be community property.
While this is the likely result of the court, this does not mean that divorcing spouses will not decide to split the retirement account on their own. And, even when a court does step in to divide a retirement account or any other marital property, what is determined to be just and right does not necessarily mean fair.
Divorcing couples dealing with property division issues should understand how best to address this problem. It is vital to note your options and how best to resolve this and any divorce issue you might encounter.
Source: Dmagazine.com, “Property Division in Divorce,” Oct. 20, 2017