Property Division Attorney in Austin, Texas

Retirement Account Division and Tax Penalties

Austin, Texas divorce law attorney, Tim Whitten talks about dividing the retirement account and avoiding tax penalties in a divorce process.

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So when people get divorced, a common asset is a retirement plan, and there is law in place that allows these retirement plans to be divided in the context of a divorce without incurring penalties or taxes. You know, previously you couldn’t alienate – you couldn’t transfer these things without having some consequence, but now they have what they call Qualified Domestic Relations Orders that will allow people to do this without incurring taxes and penalties and it’s a fairly complex area of the law. There are some lawyers that specialize in it, and they just do a lot of that. It comes up frequently. Most of the time I handle it myself. Occasionally I will refer it out to somebody if it’s extremely complicated, but it’s definitely common and it’s expected that we can divide retirement accounts as needed in the context of a divorce without incurring penalties and taxes.

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