QDRO Tag

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Shared Interest vs. Separate Interest in a Texas QDRO

One issue dividing retirement accounts in a Texas divorce is whether the division is on shared interest or separate interest. This issue is technical and can be a confusing aspect of dividing retirement plans in a divorce. Often this issue arises when the parties are determining the final language of the divorce decree and the qualified domestic relations order (QDRO) that will go to the retirement plan administrator to execute the retirement plan division based on the property division in the divorce decree. This issue can create problems in a Fort Worth divorce. If you have retirement plans among the...

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Military retirement and Texas divorces

Military pensions, or military retirement, is a complex and tedious part of a Texas divorce. Generally, dividing retirement plans in divorces can be complex legal and financial undertakings; but military pensions carry unique functions that affect how they fit into a divorce in Dallas and Fort Worth. What works in one divorce may not be remotely close to the right course of action in the next. The flexibility of military retirement can be extremely useful to both parties in a Texas divorce. It allows the parties to craft a unique division that works in the overall property division. (Private employer plans,...

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Do I need a QDRO in my divorce? Fort Worth QDRO lawyer explains

I have been receiving an abnormally large number of questions recently about splitting retirement assets in a divorce. Many of these questions involve spouses dividing 401k plans by taking a distribution, rather than the QDRO process. Following the wrong process in your Texas divorce can result in substantial tax implications for the 401k account holder. So it is important that you understand why you should use a QDRO to divide your 401k plan. QDRO in a Dallas and Fort Worth divorce The questions I receive at my Bedford, Texas law office go something like this. Husband owns a 401k account and the spouses have...

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7 Ways You Are Mishandling Retirement Plans in Your Tarrant County Divorce: Bedford divorce lawyer

, next to perhaps the home. Regardless of the value in these retirement plans, 401k plans and pension plans, many couples mishandle these accounts in divorces. The result can be a substantial financial loss for one spouse, sometimes even for both. Today's post will detail some of the most common ways people in Texas divorces mishandle their retirement plans. The best way to protect your retirement assets is with the help of a divorce lawyer who understands retirement plans. 1. Ignoring retirement assets in a divorce in Fort Worth, Texas I hear often people about to divorce decided not to bother with dividing the...

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What happens to my beneficiary designations after a divorce in Texas?

During a divorce one of the biggest issues in dividing the marital property is dividing the financial assets. Most married people will designate their spouse as the beneficiary on the account or policy. The Employee Retirement Income Security Act (ERISA) governs most employee benefits. It requires married employees to designate their spouse as the primary beneficiary unless the spouse provides a waiver. The Texas Family Code voids ex-spouses as beneficiaries on financial assets when the final order dissolving the marriage issues. Because those two laws conflict, you can inadvertently end up leaving assets to your ex-spouse. ERISA and beneficiary designations If you...

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Should I contribute Roth, after-tax, or pre-tax in my 401k? Dallas employment attorney

It depends. Each option gives you a different benefit and the respective benefits will have a maximum positive impact depending on your current financial situation, retirement needs/goals and your expectations for future tax rates. Pretax 401k contributions Pre-tax contributions provide an immediate tax benefit because you do not pay taxes on income contributed to your 401k. You also get the benefit of tax-free growth in your 401k. The downside is that all of the pre-tax money in your 401k is taxable upon distribution. 401k Roth contributions Roth contributions, on the other hand, do not provide an immediate tax benefit. You pay taxes on your...

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Can my employer change the 401k plan or make an exception for me?

Generally, no. The federal regulations that govern 401k plans require that 401k plans do not discriminate against employees. Plans must have uniform rules and the rules must apply in a uniform manner. For example, if your plan permits hardship withdrawals it must establish specific rules for those distributions. Plans can establish some variances in rules across different business units, but once the rules become effective they cannot change without amending the entire plan. In order to make an exception or change the rules, the plan has change for everybody. Even when a 401k plan desires to make a change, changes often require amending...

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Ten Common Mistakes People Make in Divorces in Tarrant County and Dallas County

Divorce is a time where preparation, rational thought and a willingness to make long term decisions are critical but these things can be hard to do because divorce is often also a very emotional time. Texas family law attorneys assisting clients in divorces have a responsibility to the legal interests of their client. Some attorneys take an aggressive approach while others prefer mediation or collaboration. This is true whether you are in Dallas, Bedford or Fort Worth. No matter the approach taken by the divorce lawyer, the divorce lawyer’s ability to benefit the client is often hindered by the client's emotional...

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How does the 10% penalty on IRA and 401k distributions work?

Many people, especially after leaving a job, make the decision to cash out their 401k accounts. Sometimes people end up in a financial hardship where they need to liquidate retirement savings early. These distributions are almost always taxable (qualified Roth and after-tax money is not); but for most people under age of fifty-nine and a half, there is an additional 10% penalty. Taking a taxable distribution from a 401k, IRA, or pension When you take a taxable distribution from a 401k, pension, or IRA account, that is ordinary income and computed as part of your taxable income for the year. Not only...

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What is a KSOP? Explained by a Dallas Employment Attorney

KSOP is jargon used within the financial and employee benefit industries as shorthand to explain the arrangement where a 401k plan houses an ESOP of the employer’s stock as an investment option. An ESOP is an Employee Stock Ownership Plan that allows employees to purchase company stock through a retirement plan. It is an ERISA plan all on its own but also an investment option within a 401k plan along with the other common 401k investment options. What is a KSOP retirement savings plan? KSOP structures became popular among employers as a way of offering company stock without having to offer employees...

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