When couples in Texas decide to divorce, the financial aspects of the end of a marriage can be the most contentious and difficult to address. Indeed, 62 percent of divorce lawyers surveyed in 2016 noted that retirement accounts are the most contentious issue faced by their clients. These accounts are often the largest single asset of a couple ending their marriage, and they are critical to both parties’ financial health and futures.

However, properly managing retirement funds as part of a divorce settlement not only requires addressing the contentious aspects of property division but also ensuring that the distribution of funds is carried out accurately. There are multiple types of retirement accounts, and each is governed by a number of legal and financial regulations that lay out how distributions should be made. Incorrect or improper distribution could cost both parties in the divorce a significant sum due to taxes, penalties and other fees.

When the retirement plan to be distributed is based at the workplace of one of the spouses, a qualified domestic relations order (QDRO) is required in order to authorize a split in the fund. The QDRO is based on the divorce agreement but is not issued automatically by the court. This document should specify the distribution by percentage because investment funds can fluctuate, so using dollar amounts could lead to an unexpected and inequitable result. Because of different treatment in taxation, the order should also specify whether the distribution is paid in cash or rolled over into another retirement account.

Throughout the divorce, a family law attorney can help represent his or her client’s interests during property division and related matters, including the protection of retirement accounts that have been built through years of work. Not only can a lawyer work to ensure that the laws are followed, but he or she can also defend their clients’ hard-earned assets.