In Washington, there is a special stipulation about public retirement benefits. Any funds contributed to the 401(k) account during the marriage are marital property and subject to division during the divorce, unless there is a valid prenuptial agreement in place. Oftentimes, spouses will disagree over the appropriate valuation of assets such as real estate and privately-held businesses, and it will be necessary to engage the services of a neutral third-party appraiser to provide a valuation. A QDRO gives you protection and guarantees that a marital settlement agreement does not by allowing the funds in the retirement plan to be separated and withdrawn without penalty and then deposited into the non-employee spouse’s retirement account (typically an IRA) or otherwise making provisions for payout. 2. Accessing one’s retirement account for the purposes of withdrawing money before reaching the age of 55 years old can result in specific federal income tax and penalties. This means your 401(k) is seen as joint property that both you and your spouse own. For instance, lets assume parties live together like a married couple for 20 years in Montana, which is a common-law marriage state. In such a case, the court generally splits contributions to the plan equally among both spouses. Protecting Retirement During A Washington State Divorce How Can I Protect My 401k or Retirement in Divorce? This means that even when spouses agree on all the terms of the divorce, they still need to wait 90 days to divorce under Washington state divorce laws. The court will then issue an order of asset and debt division. If you are thinking about filing for divorce, or if think your spouse may be preparing to file for divorce, we encourage you to contact us for a confidential initial consultation. In a pre- or postnuptial agreement, you can designate that your 401k will be considered your separate property in the event of a divorce. Be the first and Add your Comment below. Our attorneys in Tacoma, Washington, take a straight-forward approach to the law. Question: Who will get the house in my divorce?Answer: Though Washington State’s laws make the outcome difficult to predict, there are guidelines judges keep in mind. at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to a spouse . by Samuel K. Darling, Divorce at Family Law Lawyer at Genesis Law Firm. Dividing Washington State Retirement Plans. There is a fair amount of social stigma attached to prenuptial agreements, but we strongly advise to consider putting one in place prior to your marriage. Don't assume your rights to retirement assets are covered just because your divorce … But Washington will recognize a common-law marriage that occurred in a common-law marriage state. We will get back to you shortly. Grounds for divorce. Please complete all required fields below. Washington only grants divorce on a no-fault basis. Unlike most other states, there are no residency requirements to initiate a divorce on Washington. In most cases, divorce settlements follow an equitable distribution, meaning that 401(k) assets accumulated during the marriage are divided in half. Do I Have To Submit To A Field Sobriety Test? Minor in Possession & Minor in Consumption, 4th Degree Assault & Domestic Violence Assault, Sexual Exploitation / Patronizing a Prostitute, Felony Theft / Theft in the 1st & 2nd Degree, Your Mental Health and Weekends in the COVID-19 Era, 7 Ways To Survive Divorce With Your Sanity Intact, Top 3 Tech Changes You Need to Make ASAP in Divorce or Separation. Under Washington law, a couple’s “community” assets are subject to equitable distribution during the divorce process. Marriages or domestic partnerships in Washington can end through an annulment, legal separation or a divorce, also known as a dissolution of marriage. Protecting your retirement is obviously one of the most important things you do in the divorce process. That includes wages and employment benefits as well as houses, stocks, and cars. How Retirement Assets are Treated in Divorce in Washington State. If you did not, it is never too late to do a post-nuptial agreement if you both want to make sure that you and not a court will decide what happens to your accounts in the event of a divorce. Under Washington law, all assets acquired during the marriage are subject to division (with limited exceptions), and some assets acquired prior to the marriage may be on the table as well. If your 401(k) is performing well, or if you … with whom the children reside the majority of the time.”. If so, the recipient spouse may ask for these funds if: Each state publishes laws that determine how marital property should be divided during divorce. Perhaps a recipient spouse owes alimony and has achieved retirement benefits as an employee of the State of Washington or a city in this state. Paul Battan has worked with the division of retirement assets in divorce for over 30 years. Washington's marital property laws recognize the concept of "community property," in which almost all property acquired during a marriage is presumed to be jointly owned by the spouses and therefore subject to equal division upon divorce. There are a LOT of different state retirement plans: LEOFF 1 and LEOFF II; PERS I and PERS II; etc. If the retirement account that is being divided is one that has been earned through an employer (e.g., pension, 401(K), etc), then it will be necessary to contact the Human Resources office of the employer to find out what forms, if any, are needed in order to properly complete the transfer. Although some legal problems can demand complex solutions or need to be resolved through the courts, it is always our goal to find the simplest solution to a legal dispute. Any money you earn and any property you acquire during your marriage is considered community property and subject to division. In the case where an agreement can be reached, parties may divide their property and debts any way they mutually choose. After identifying and placing an appropriate valuation on your community assets, you can then turn your attention toward formulating an equitable distribution. Washington law requires that the court's division of your property be "just and equitable" (RCW 26.09.080). Call or Text. Posted by Michelle Dellino | Jan 10, 2017 | 0Comments. Request Consultation: Typically, the individual state laws determine how the funds in a 401(k) are divided. I’M MOVING IN WITH MY PARTNER. All information contained herein is provided for the purpose of providing basic information only and should not be construed as formal legal advice. If you have substantial assets it is essential that you hire a qualified Washington divorce attorney with experience and relationships with appraisers and valuation experts. Washington law requires a “just and equitable” distribution of assets that takes into account: Critically, while community assets are deemed to be owned equally by both spouses, an equitable distribution does not necessarily mean an equal distribution. Request Your Consultation: Dividing the Property Along with the normal Washington property division laws, the federal government has enacted the Uniformed Services Former Spouses’ Protection Act (USFSPA) that governs how military retirement benefits are calculated and divided upon divorce. Your divorce order must specify division. This includes real estate, spouse’s earnings, pension benefits and 401(k) contributions. Spouses then have several options on how … . During the divorce negotiation process, spouses often make trade-offs. This is not because people are assuming their marriage will end in divorce, but because they are choosing to be prepared for all outcomes and protecting themselves and their separate property. If the 401k account was established prior to the marriage, state divorce laws may permit exclusion of pre-marital contributions and earnings. WHAT SHOULD I KNOW? When the court is making the determination, they will consider the type and amount of each property, the length of the marriage, and each spouse's current economic circumstance. To schedule an appointment at our law offices in Tacoma, WA, please call 253-272-2997 or send us a message online today. Wills, Estate Planning, Probate and Elder Law FAQ, Real estate holdings (including, but not limited to, the family home), Artwork, jewelry, tools, and other personal property items, Digital assets (such as music libraries, photo libraries, and social media accounts). Getting divorced in Washington means more than splitting the sheets. A divorce in Washington State could affect different types of retirement plans and funds, including the following: IRAs and Roth IRAs; 401K plans and 403K plans; Employee Retirement Income Security Act (ERISA) funds One particular valuation issue that routinely comes up during the divorce process is how to value IRAs, 401(k)s, pensions, and other retirement assets. Two primary types of divorce laws are in effect: community property law and equitable distribution. Which assets is your spouse likely to prioritize? There may be exceptions as to what is considered community versus separate property, and it is important to have a solid understanding of how your property will be characterized. It is recommended that you work with a family law attorney who will help to prepare and inform you of your legal rights and options in this process. The State has its own Department Retirement Orders, that need to be signed by the court and approved by the State. If you believe that your spouse has a pension, 401(k), IRA, or other retirement or disability plan, talk with a lawyer about your rights. The court won't necessarily do a 50/50 split, but it … For example, rather than dividing a retirement account, the spouses may agree that one spouse will keep the entire account in exchange for giving up his or her rights to other assets of equal value. Under Washington law, all assets acquired during the marriage are subject to division (with limited exceptions), and some assets acquired prior to the marriage may be on the table as well. Washington is not a common law marriage state. It can take months or years to finalize a divorce and all 401k contributions made during this time will be considered marital property in divorce. Where are you likely to find common ground? Washington State Divorce Laws for the Division of Community Property. What Happens If I’m Under 21 & Arrested For DUI? You only need to reside in Washington when you file a petition with the court. This means that all property and debt acquired during … Dividing Retirement Accounts. In order to protect your assets to the greatest extent possible, you need to know (i) which assets are subject to distribution (and which are not), (ii) the value of your assets that are subject to distribution, and (iii) what constitutes an “equitable” distribution under the circumstances of your divorce. You may agree to split the 401k earnings equally or in a way that feels equitable to your unique situation. Additionally, while dividing individual assets is one option (to the extent practicable), oftentimes, divorcing spouses will agree to give up their rights in certain community assets in exchange for exclusive ownership of others. Your family law attorney can advise you around these complex distinctions. While this may be a non-issue for assets that were recently acquired, particularly in the case of a long-term marriage, it is not unusual for the date of acquisition to become an issue for certain items of real and personal property. Our attorneys will advocate for your best interests and help you to protect your assets wherever possible. By law, a divorce in Washington state is subject to a 90-day “cooling off” period between service on the non-filing spouse and the final divorce decree. There are also a lot of municipal retirement plans as well. Regardless of “ownership”, anything else you or your spouse have acquired during marriage is generally considered to be community property. Washington is a “no-fault” divorce state. Working out the financial details is often one of the most contentious aspects of a divorce. The same can be done with a 401(k) plan, where the QDRO can award a spouse an interest in the retirement benefit in a divorce without incurring any penalty and without any tax as long as it is rolled over into another tax deferred vehicle (IRA). Our attorneys can assist you with the process of identifying your community assets and developing a strategy to protect what matters most in your divorce. Similarly, all debts accrued during the course of your marriage are also considered to be community and subject to division. Once you have identified the assets that are subject to division in your divorce, then you need to determine their present value. These assets are supposed to appreciate over time, and the current dollar value of an account may or may not be entirely dispositive.