Legal Question in Family Law in Texas

You do not have to split the 401(K) ever, but to the extent that it's value increased during the marriage, it is community property subject to division. Depending on your mix of assets, you may be able to effect a just and right division of the commnunity estate without touching your 401(K).

However, if you have to divide the 401(K) because that is the only way to achieve a just and right division of the marital estate, then it will be divided by an order called a QDRO. And yes, you would divide prior to you using it.

Assets divided by QDRO do not create tax implications for you. In other words, if you carve out $10,000 from your 401(K) by QDRO, it will go into an IRA for the spouse. Because it's not considered a distribution, there is no penalty to you (other than your 401(K) is now smaller by $10,000). If your spouse chooses to take a distribution from his or her $10,000 share, then the spouse pays any penalties and taxes arising from that.

Hope that helps!!