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Employment Attorney explains: When can I take a 401k loan?

401k loans allow you to borrow against your 401k account tax-free (as long as you pay it all back). The loan payments typically occur by payroll deductions. If considering a 401k loan you should carefully consider he loan terms and the ramifications. Your employer does not have to offer 401k loans and can severely limit …

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Retirement Plan Participant Disclosures

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure these retirement plans provide plan participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) …

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ERISA Retirement Plan Participant Disclosures

By now you received fee disclosure statements on your 401k, ESOP, 403(b) and profit sharing plans. These fee disclosure statements, known as 404a5 Participant Disclosures, ensure retirement plans provide participants with a minimum amount of information about the fees charged by plan investments and fees paid by the plan (often from those investment fees) to companies that …

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Benefits of staying in your 401k after you leave an employer

When employees leave employment, the common response is to want to sever ties and move on, especially if the employee left involuntarily or on bad terms. However, withdrawing or rolling over your 401k may not be the best decision in every case. There are important financial and legal considerations. Before making decisions about your 401k …

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Why does my spouse get part of my 401k or pension in a divorce?

Spouses in Fort Worth and Dallas are entitled to part of your retirement accounts in Texas because the federal law surrounding retirement plans allows for spouses to earn an interest in your retirement accounts during the marriage. State law allows for family courts to divide these assets based upon a domestic relations order. (That usually becomes …

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What is a living trust and should I have one in Texas?

Known as either a “living trust” or a “revocable living trust”, a trust is a legal creation to simply passing assets from one generation to the next without having to rely on a will and probate courts, which can be more expensive, more complex and financially disadvantageous. While there are many kinds of trusts that …

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What is an Summary Plan Description?

SPD is a Summary Plan Description. It is the employee benefit plan documentation that must be provided to all participants and beneficiaries that explains the basic rules of the plan in layperson’s terms. It contains descriptions of the rules for eligibility, participation, vesting, benefit calculation, benefit availability and how to file a claim for benefits. …

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Divorce attorney explains community property rules in Texas

Texas is one of nine states in the nation that recognizes marital property as community property. Property owned in Texas by a married couple is either community property or separate property. Community property includes property owned jointly by both spouses. Separate property includes property owned by only one spouse. The law presumes all marital property is …

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How does an ESOP work? How does it work with a 401k plan?

An ESOP is an Employee Stock Ownership Plan. It is an ERISA-governed employee benefit plan that allows the employee to purchase shares of the employer’s stock on a tax deferred-basis. (You don’t pay taxes today but you will pay taxes when you take your money out of the plan.) ESOPs were common before the rise …

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What is ERISA and why should employees care?

ERISA, the Employee Retirement Income Security Act of 1974, is a federal regulatory regime that governs private employer retirement, health care benefits and certain other employee benefit plans. It is a massive web of legislation, Department of Labor regulations and IRS regulations. ERISA also borrows from and incorporates securities regulations on investments (such as in 401k plans). ERISA …

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Should You Take the Lump Sum or the Annuity Payments from Your Pension?

This highly important question tends to receive significantly less attention in today’s economy than it should. Many people see a lump sum as a way to either pay down debts or seed stock gains. This attitude is further fueled by financial advisors who need to bring in assets, like your pension lump sum and 401k, …

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Can I use my 401k to buy a business, franchise, house, investment property, etc.?

There are many retirement asset-funded investment and business schemes that run from taking loans to “rollover as business startup” (ROBS) plans. They have been around for many years and typically they are generally a bad idea. I discourage most would-be investors due to the legal and financial liability involved. I have had people come to …

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