QDRO Tag

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Why does my spouse get part of my 401k or pension in a divorce?

Spouses in Fort Worth and Dallas are entitled to part of your retirement accounts in Texas because the federal law surrounding retirement plans allows for spouses to earn an interest in your retirement accounts during the marriage. State law allows for family courts to divide these assets based upon a domestic relations order. (That usually becomes a QDRO when the plan qualifies it.) In this case, state law provides the method to divide the accounts. The law states that employment income earned during a marriage is joint marital property. Because retirement savings are part of that income, the spouse has an entitlement...

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Bedford divorce attorney explains community property rules in Texas

Texas is one of nine states in the nation that recognizes marital property as community property. Property owned in Dallas, Fort Worth or Bedford, Texas by a married couple is either community property or separate property. Community property includes property owned jointly by both spouses. Separate property includes property owned by only one spouse. The law presumes all marital property is community property. The law is serious about a marriage being the joining of two people. In a Tarrant County divorce or Dallas divorce the community property rules are key because many people own important community property like homes and 401k plans. Working with...

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How does an ESOP work? How does it work with a 401k plan?

An ESOP is an Employee Stock Ownership Plan. It is an ERISA-governed employee benefit plan that allows the employee to purchase shares of the employer’s stock on a tax deferred-basis. (You don’t pay taxes today but you will pay taxes when you take your money out of the plan.) ESOPs were common before the rise of 401k plans in the 1980s. Today it is common for employers to offer company stock in their 401k plans. The company stock in the 401k plan is often an ESOP within the 401k in a structure sometimes called KSOP. (For more information about KSOP plans...

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What is a QDRO in a Texas divorce? Fort Worth divorce attorney explains

QDRO stands for Qualified Domestic Relations Order. There are two components to a QDRO. One is the domestic relations order and the second is the qualification. A domestic relations order is an order issued by a state judge under the state’s domestic relations law. These orders are typically part of the property settlement following a divorce. It assigns a property interest belonging to one person to an alternate payee. The two most common alternate payees are former spouses and children, who receive the order for child support. QDROs are complex orders. If you need a QDRO in your divorce you should consider...

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Can I use my 401k to buy a business, franchise, house, investment property, etc.? Texas QDRO lawyer explains

There are many retirement asset-funded investment and business schemes that run from taking loans to “rollover as business startup” (ROBS) plans. They have been around for many years and typically they are generally a bad idea. I discourage most would-be investors due to the legal and financial liability involved. I have had people come to my law firm from Fort Worth and Dallas looking for information about these types of 401k plans and as a Fort Worth employment lawyer I rarely find these plans a good idea. What are 401k rollover as business startup plans in Dallas-Fort Worth? These plans are concocted by financial...

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