Avoiding a Financial Train Wreck
Divorce not only may result in emotional devastation, but financial disaster may occur also. So often, parties divide retirement accounts to equalize the divisions of the marital property. Importantly, Texas Community Property law mandates, “In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right.”
The Texas Family Code provides that “In ordering the division of the estate of the parties to a suit for dissolution of a marriage, the court may consider: (1) whether a specific asset will be subject to taxation; and (2) if the asset will be subject to taxation, the the tax will be required to be paid.” And it is important to remember that family law attorneys are not certified public accountants – tax advice is best obtained from those professionals who have a complete grasp on the Federal Internal Revenue Tax Code. A mistake may cost the party substantial sums of money, so it is vital to obtain solid advice going into the process.