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lmdees
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(recently joined)
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10/23/06 04:55 PM
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Assets
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When splitting a 401K account in Texas, is it split mutually? Also, if you know, do the proceeds received from a 401K split have to be rolled back into a 401K or can they be used to set up a new home?
Thanks!
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Re: Assets
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Unless this is an at fault divorce, you will be entitled to one-half of the increased value in the 401K during the marriage. The increase in value from the date you were married until the date of the divorce is called community property. The money would be taken from the 401K account using something called a Qualified Domestic Relations Order. If you choose to put the money into a house rather than a 401K or IRA, you will likely pay a 30% penalty. In other words, if you get $10,000 from the 401K, $3000 would go to uncle sam unless you invest back into a 401K or IRA.
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