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Division of Retirement, Employment Benefits and Other Plans

The Texas Family Code provides that in a "decree of divorce or annulment, the court shall determine the rights of both spouses in a pension, retirement plan, annuity, individual retirement account, employee stock option plan, stock option , or other form of savings, bonus, profit-sharing, or other employer plan or financial plan of an employee or a participant, regardless of whether the person is self-employed, in the nature of compensation or savings."

Therefore, benefits or property interests that have accrued during marriage, even if they may not be realized until after the marriage, are subject to the court's just and right division.  The rules governing the various accounts are voluminous; thus, making it impossible to adequately address the matter in this brief primer.  For example, there are circumstances where the Taggart formulas is applicable, which is 1/2 x (# years of service while married) ÷ (# years of service at retirement) x value of accrued benefit at date of retirement = non-employee spouse's share.  However, there are instances where the Berry formula is required, which is 1/2 x (# years married under pension plan) ÷ (# years employed under the plan as of date of divorce) x value of plan as of date of divorce = non-employee spouse's share.  Finally, there are situations where neither formula is applicable for the particular asset in question.  Hopefully, what has been illustrated is that this is complicated process that requires assistance not only from your attorney, but also, other professionals, such as an accountant.