Retirement and QDROs
Dividing plans without losing the award to paperwork.
Retirement, equity compensation and the parts people forget
Retirement accounts earned during the marriage are community property even though only one name is on them. Dividing a qualified plan takes a separate order — a qualified domestic relations order — entered alongside the decree, and a decree that awards a share without the QDRO to implement it produces a problem years later when the plan administrator declines to pay.
Equity compensation is harder still. Restricted stock and options that were granted during the marriage but vest after it are commonly part community and part separate, apportioned by when the work that earned them was performed. Deferred compensation, unexercised options, stock in a closely held company and the goodwill of a professional practice all require valuation before they can be divided, and valuation is expert work.
How This Plays Out in Practice
Dividing plans without losing the award to paperwork. The specifics turn on facts — the length of the marriage, what is in the estate, whether children are involved, and how much the two of you still agree on. What does not change is the framework: Texas courts apply the Family Code, and the outcome follows from how your facts meet it.
Lisa G. Garza handles these matters from the firm's Dallas and McKinney offices, for families throughout North Texas.
Questions
How do I prove an asset is my separate property?
By tracing it back to its separate source with documentary evidence, to a clear and convincing standard. Texas Family Code § 3.003 presumes property possessed by either spouse during or on dissolution of marriage is community property. An asset kept in its own account is straightforward to trace; one commingled with community funds over years may not be traceable at all, in which case it is treated as community.
Is my spouse's retirement account part of the divorce?
The portion earned during the marriage is community property even if only one spouse's name is on the account. Dividing a qualified retirement plan generally requires a qualified domestic relations order entered along with the decree. Without that separate order, the plan administrator will not pay a share to the other spouse.
What happens to the house?
It depends on how the house is characterized and on what else is in the estate. Common outcomes are sale with the proceeds divided, one spouse buying out the other's interest, or one spouse keeping it. Where separate-property funds paid for a community home or community funds paid down a separate-property mortgage, a reimbursement claim may be owed between the estates.
What if my spouse is hiding assets?
Formal discovery is the answer — sworn inventories and appraisements, requests for production, subpoenas directly to banks and employers, and depositions under oath. Where community property has been concealed, given away or wasted, Texas recognizes a claim for fraud on the community, and a court may reconstitute the estate and award a disproportionate share to the wronged spouse.