Property and asset division is different in a divorce, depending upon which state the proceedings take place. With Texas being a community property state, the courts split most property acquired during the marriage between both parties. It is important to understand this concept and how it applies to your pension in the case of divorce.
Pension falls into the property category, so it is subject to community property rules for property division in divorce. In general, community property is valued and split into equal parts between the two spouses. This does not apply to property given to one party as an inheritance or gift, nor does it apply to any property that one party had prior to the marriage. This factor can affect how the pension is distributed. If the pension began before the marriage, the spouse will only receive payment for the portion earned during the marriage, including interest. Also, in splitting the pension, various factors may contribute to the final determination, such as the value of separate property, earning capacity, education level, marital fault, child custody standing and the length of the marriage.
A Qualified Domestic Relations Order breaks down the division of a pension. Along with other necessary information, this order provides the percentage of the pension paid to each spouse, as well as the time period for which it applies. This is given to the plan administrator for proper distribution. Depending upon the parameters of the pension plan, the administrator may provide a lump sum payment or monthly installments. If the spouse earning the pension has not retired or reached retirement age, the other spouse may have to wait until that time for the payments to begin.
Pension splits in a divorce can be confusing, but with the right information, you can make educated decisions. To help you fully understand your rights and the distribution of a pension, it may be beneficial to speak with a divorce attorney.