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Will you deal with these common investments during divorce?


Investing might seem like a far-off reality for the average person in Texas. As such, it may come as a surprise for some people to learn that they have already made fairly significant investments in not just real estate, but also their future. Purchasing a home and saving money in a retirement account are both considered forms of investments. So how should these investments be dealt with during divorce?

Investments like real estate often involve both a financial and emotional component, especially if the property in question is the family home. This type of investment comes with a certain amount of upkeep as well as other financial commitments, such as property taxes. Couples must decide whether the person who wants to keep the home is financially equipped to do so. When that person does not have the means or when couples cannot decide who should keep the house, it is sometimes better to sell the property and divide the profits.

Retirement accounts are another confusing investment. In general, making early withdrawals from retirement accounts can lead to steep penalties, but divorcing couples have options to avoid this. After deciding how much of the savings each person is entitled to, they can use a qualified domestic relations order — a QDRO — to make withdrawals related to the divorce without incurring any penalties. These are necessary for accounts like 401(k)s, but are not necessary for IRAs.

Making an investment of any kind is a big deal, and Texas couples usually put a good amount of time and effort into these decisions. That type of emotional and financial commitment can make dealing with investments during divorce especially difficult. This does not mean that it is impossible though, and those who pay careful attention to detail and seek help when necessary can usually find reasonable solutions to property division.

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